Med. Marijuana: legitimate business or rebel yell?

[Merman]

Though many will disagree.... this is one step closer to legalization IMO....


Calif. officials telling medical marijuana dealers to pay taxes
The Associated Press
Article Launched: 04/07/2007 01:10:35 PM PDT

SACRAMENTO- The taxman is going after the medical marijuana man.
For the first time since California voters approved use of medical marijuana more than a decade ago, the state Board of Equalization is telling the estimated 150 to 200 medical marijuana retailers in California to pay sales taxes on pot.
"If you sell medical marijuana, your sales in California are generally subject to tax and you are required to hold a seller's permit," the board said in notices sent out in February. "If you do not obtain a seller's permit or fail to report and pay the taxes due, you will be subject to interest and penalty charges."
Proposition 215, the 1996 initiative that decriminalized use of marijuana for medical purposes, did not address how state tax officials should deal with medical marijuana sales. The sales weren't covered before Proposition 215 because they were illegal.
The board ultimately decided that medical marijuana was not exempt from sales taxes because it was not dispensed by a pharmacist or approved by the Food and Drug Administration as a medication.
"For the Board of Equalization, any tangible personal property not exempt from tax is subject to a sales tax," said Betty Yee, the board's chairwoman.
The board's action has divided the medical marijuana community, with some sellers saying it helps legitimize their businesses. But others worry that any tax information they report will be used against them by the federal government,which still bars use of medical marijuana.
"It's frustrating," said Chris Moscone, an attorney who is representing the Hemp Center, a San Francisco medical marijuana dispensary that is negotiating with the board on back taxes. "There are basically two camps: Those that want to be treated like legitimate businesses, and the other side, where they're still rebels and don't want to be taxed."
The applications for a seller's permit do not require the retailer to disclose what he or she is selling, which would make it difficult for federal officials to track sales.
Kris Hermes, legal campaign director for Americans for Safe Access, a national medical marijuana advocacy group, said the board would get more medical marijuana dealers to come forward and pay taxes if it agreed not to go after back taxes.
"If they started collecting taxes when they sign up for seller's permits, that would reduce anxiety for many of these providers," Hermes said. "And it would probably increase the level of participation in the state."
But Yee says that's not an option, that the board has to treat all retailers the same.
The board has the authority to collect taxes going back as many as eight years.
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[robobond]

I voted yes as if it has any hopes of government approval it must gain government revenue.

 

[tngreen]

im with ya robobond! its all about the money and once they realize they can really gain and make people happy, something will change. they are just too stubborn and scared to make a change.

 

[Erin Kerrik]

Hmm. Well, if they are taxed, that puts them in a class with more restrictions on political donations, which would be bad for purposes of further repealing prohibition.

I voted "yes" before I thought of that, however, as my immediate thought was why should it be any different than taxing Starbuck's coffee.

 

[Pops]

Medicine is not taxed, but herbal supplements are. Until mj is made into a medicine, it should be taxed like any other supplement.

 

[Erin Kerrik]

Medicine is not taxed, but herbal supplements are. Until mj is made into a medicine, it should be taxed like any other supplement.

I believe the article describes a proposed tax for the merchant, not the consumer. That the article refers to this as a "sales tax" seems to be misleading.

Which doesn't change what I think is your overall point: that the sale of medical marijuana should not be taxed differently than other medicines.

 

[vonforne]

I voted yes as if it has any hopes of government approval it must gain government revenue.

yep. Until the government gets their cut they will keep it illegal for all. once they start making revenue on it then the path to legallization has become shorter.

 

[Erin Kerrik]

yep. Until the government gets their cut they will keep it illegal for all. once they start making revenue on it then the path to legallization has become shorter.

I don't get the monetization-for-government-is-the-key angle. If we had decriminalization without taxation wouldn't that decrease government outlays many times more than any taxation could generate? How much bud would have to be taxed to equal the savings of one less prisoner for one year?

$40,000 = 1 prisoner for 1 year
$40,000 = 10% tax on 10,000 $40/eighths

I think a more likely but similar feat would be figuring out how Monsanto and Eli-Lilly could profit off of decriminalization.

 

[Guest]

Vonforne unfortunately the gov't already makes revenue from MJ due to the asset forfeiture laws,a 50% tax on growers wouldn't match what they can steal from us.Until asset foreiture laws are changed regarding MJ,normalization is just a pipedream.We're not only up against ignorance and bias,but wealth just there for the taking.

 

[Erin Kerrik]

Smilin' -

Where does the revenue go from forfeitures?

I know there is a lot of transfer of our tax dollars going to private prison companies from marijuana prohibition. Plus a lot of government departments and jobs that depend of pot being illegal. It's the police and prosecutors with livelihoods they perceive to be on the lines that fight hardest ... not that there's a lack of violent criminals to keep them busy ... granted, they are too dull to go after the corporate criminals with the most impact on society.

 

[Verite]

Until the state can make the promise of no federal legal interferrence then you have every right to not pay the tax under your 5th amendment rights not to incriminate yourself. Paperwork showing you paid tax on marijuana sales would be self incriminating to the feds.

 

[Pops]

It is ironic that several states have tax stamps for marijuana. I believe that Idaho has one that costs $6 a gram. Theoretically if you paid a tax by buying the stamp, the state should not be able to arrest you for possession. Damned if I am going to pay $170 an oz, just for a state tax. At $2700 a pound, that would make the state one of the more successful drug dealers in the country.

A sales tax on pot doesn't really affect the med clubs or their profits. It is just like the very high taxes on tobacco, it is simply passed on to the consumers. Politicians will have to demonize mj so it doesn't look like they are taxing sick people who need the medication.

 

[Pops]

Verite, your philosophy is interesting, but would be disregarded by a court. Remember that asset forfeiture and fines for growing in theory make a profit for the government and since they are profiting from an illegal business, they are accomplices to that illegal business. Same things with taxes and tax stamps. Governments tend to ignore their own illegal activities and exempt themselves from the laws that we have to follow.

 

[Verite]

But thats the exact arguement the cali med pot growers are serving. If they pay the tax they will be setting themselves up for easy fed pickens.

p.s. can any court 'disregard' a citizen of their rights? .. doubt it.. not when a lawyer gets involved.

 

[HCSmyth]

The thing about prohibition on marijuana that intrigued me ever since I knew what marijuana was, was how a plant grown in dirt given some water and fertilizer could be worth $200 plus dollars an ounce. Because of supply/demand and the only quasi legality of cannabis the price is still inflated in California. This example of the IRS going after California medical producers is no shock as they could careless were money comes from. If this same state government was massively ignoring prosecuting child pornographers and thus the kiddie porn industry was booming in California you can bet the IRS would go after them. As there is no money too dirty for the IRS to touch!

 

[Erin Kerrik]

Interesting tidbit: In early America, most states/commonweal accepted hemp as tender for paying taxes. (Source: Herer)

 

[Merman]

Great discussion y'all... I've never purchased anything from a club or dispensary... do you get a receipt for payment of any kind?

I just looked at some store receipts I had for various things... some have a specific description what was purchased and other just list 'Merchandise' or 'Apparel', etc... I don't see the purchaser really having any federal problems here since any amount they can buy at a club would be within their 215 limits and not really of federal interest (unless of course, the purchaser has outstanding fed warrants or is on the radar for other reasons).

I think the tax issue revolves around the dispensary or club only since under federal laws they are probably holding several pounds at any given time, the suppliers have probably used interstate highways (Fed jurisdiction) for transportation, and are certainly 'trafficking' for profit.

Are med cluds/ dispensaries profit or non-profit? I've read some news stories about bust and seizures in southern California related to the untaxed profits being made and the owner of the club getting out-of-hand with business related tax write-offs of houses, cars, boats, etc.

 

[Erin Kerrik]

But thats the exact arguement the cali med pot growers are serving. If they pay the tax they will be setting themselves up for easy fed pickens.

Again, I think the issue at hand is a state tax on income from the dispensaries, not a direct tax added to the sale price by government.

 

[Guest]

Until the state can make the promise of no federal legal interferrence then you have every right to not pay the tax under your 5th amendment rights not to incriminate yourself. Paperwork showing you paid tax on marijuana sales would be self incriminating to the feds.

Instead of repeating verites post I quoted it as This is the TRUTH. I would'nt be suprised if the fed have a hand in introducing the idea of the sales tax to create a list of med users. Our goverment does pull some sneaky shit over people who arent watching. Maybe the state of cali should do a little more at protecting med users from the DEA instead of serving them up on a open platter!

 

[Guest]

I don't think it should be taxed until it can't be taken away. meaning that it's fucked to pay taxes to a state that can't/won't defend you against the Fed. I won't pay taxes on a product that the govt. can take away after I've paid for 2X. Otherwise, if Fed. legalised then I'd say yes taxes are fine.

J.