The Tax Foundation: States Projected to Post Higher Marijuana Revenues in 2021


With several states contemplating legalization of recreational marijuana, and federal lawmakers starting the process of federal descheduling, it is a good time to examine the tax implications of legalization. Taxes play a crucial role in the success of marijuana reform, as competitive prices in a licensed market are key to convert illicit consumption to the legal market. Marijuana legalization has been gaining momentum at the state level in recent years, partially because of the prospect of new tax revenue. In 2021 alone, four states (Connecticut, New Mexico, New York, and Virginia) have passed bills to legalize. Thus far, 19 states’ voters or legislatures have passed legislation to offer licenses to sell recreational marijuana as well as impose excise taxes. Most of those states also apply their general sales tax to cannabis sales, and some allow localities to levy additional taxes. While it is still a relatively new market (Colorado was the first state to legalize cannabis in 2012), excise tax revenue figures to date can help lawmakers get a sense of the revenue potential at different rates and contribute to the development of sound marijuana tax policy. The following table shows the states that levy excise taxes on marijuana. It includes the tax design, final revenue in fiscal year (FY) 2020 and estimated revenue for FY 2021, and revenue per capita generated in the same fiscal years. In total, states with licensed markets collected $1.7 billion in FY 2020 from state-level excise taxes. Note that these numbers do not include sales tax or local tax revenue from marijuana transactions. State Marijuana Tax Collections Continue to Grow Collections in States with Operational Markets in FY 2020 and FY 2021 State Tax Design Tax Rate Revenue FY 2020 Revenue Per Capita FY 2020 Projected Revenue FY 2021 Projected Revenue Per Capita FY 2021 Alaska Specific $50/oz. mature…

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Source : The Tax Foundation: States Projected to Post Higher Marijuana Revenues in 2021

reposted by Cannabis News World

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