Washington State’s recently enacted Marijuana Market Reform Bill, which I discussed in a prior post, eliminated the State’s three tier tax system. Effective July 1, 2015, a thirty-seven percent tax will be collected exclusively at the retail level.
The new single point tax will be assessed at the retail level on consumers, just like a sales tax. The tax is to be paid by the buyer and held in trust by the retailer until paid to Washington State each month.
The Washington State Liquor Control Board recently stated that these tax changes are not retroactive. All transactions occurring before July 1, 2015 will be taxed at the prior 25% excise tax level applicable to all licensees. For sales occurring after July 1, 2015, producers and processors will not be liable for any excise taxes.
The new retail only tax should provide not only state tax relief for licensees but also some relief on the federal taxation level. All licensees should consult with their tax advisors on how the tax system will affect their businesses.
For more information on the regulation of marijuana businesses in Washington State, please contact Heather Wolf.