Senate panel passes 25 percent tax on pot
A Senate panel on Friday approved tax provisions for a marijuana legalization bill.
The Senate Finance Committee placed a 25 percent excise tax on the sale of marijuana. The tax, which would function like a sales tax, would be applied to retail sales of the drug. Tax receipts would go into a special marijuana fund; sales taxes are typically funneled into the education and general funds.
The legislation legalizes marijuana effective January 2, 2018. In the first six months of the fiscal year, a 25 percent tax would generate between $5.6 million and $8.7 million, according to estimates from the Joint Fiscal Office.
The tax would raise between $13.4 million and $20.8 million in 2019, the first full year the law would be in effect, according to Sara Teachout, a financial analyst for JFO.
The Shumlin administration estimates the cost to regulate the legalized sale of pot would be $2.2 million.
The estimates are lower than projections from a Rand study, which pegged tax revenues between $20 million and $75 million. That’s because Rand estimated the state would benefit from pot tourism; JFO used more conservative state estimates for the number of people from out of state who would purchase marijuana in Vermont.
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