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Wednesday, April 22, 2015
25% Tax Would Make State Senior Partner in Marijuana Business
By Andrew Walden @ 5:47 AM :: 7415 Views :: Taxes, Drugs

by Andrew Walden

High tobacco taxes make Hawaii the senior partner in the tobacco business--creating a conflict of interest between State tax revenues and public health--now a new draft of HB321 proposes to do the same for marijuana.

Heading into Conference Committee, HB321, SD2 proposes a 15% gross proceeds tax and a 10% special sales tax on so-called 'medical' marijuana sold in Hawaii.

Tom Yamachika of Tax Foundation Hawaii tells HNN: "The tax provisions got plopped in at the very last minute by the last two committees that heard the bill. There wasn't any opportunity for any public debate on that part of it."

How would the State be influenced by marijuana tax revenues?  Just look at what has happened to e-cigs this session. 

The Hawaii Department of Health reports tobacco use dropping 20% from 2011 to 2013 as e-cig use soared.  The medical jury is still out on the health effects of e-cigs, but there is no doubt that smoking tobacco causes cancer.  As tax revenues dwindle, legislators are cracking down as the new devices very possibly in direct conflict with the health of their constituents. 

HB145, the cigar Frankenbill, is heading into conference with text which would "amend the definition of 'tobacco products', to include any product containing nicotine, but not containing tobacco"--ie e-cigs.  HB145 is one of five bills cracking down on e-cigs in conference committee or waiting for the Governor's signature.

What will the State do to protect its marijuana revenue stream?   The answer is already before us.

The American Cancer Society reports: "Marijuana smoke contains tar and many of same the cancer-causing substances that are in tobacco smoke."

Unlike tobacco companies, the State enjoys sovereign immunity.  Ironically, it was multi-billion dollar class action lawsuits which forced the tobacco companies into partnership with the states.  

Tobacco companies merely hid evidence of the deleterious effects of tobacco cigarettes.  Politicians go much further, not only hiding the harmful effects of marijuana but also promoting marijuana as 'medicinal.'  Some are talking up the use of marijuana by children

And this is before they have tasted their first dollar of revenue.



HB321, SD2 Text, Status

§237-A Special general excise tax on marijuana sales by dispensaries.

(a)  There shall be levied, assessed, and collected on a marijuana dispensary that is licensed under chapter      a general excise tax on marijuana sales in the State measured by the application of a rate of fifteen per cent against the gross proceeds of sale of marijuana.

(b)  The tax imposed under this section shall be in addition to the retail marijuana special sales tax on marijuana sales under section 237-B.

§237-B Retail marijuana special sales tax. In lieu of the general excise tax under section 237-13, there shall be levied, assessed, and collected on a marijuana dispensary that is licensed under chapter     , a retail marijuana special sales tax of ten per cent of the gross proceeds of sales by a marijuana dispensary.



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