Oregon’s marijuana sales tax holiday will come to an end on January 4th, when a 25% tax will kick in on all sales, reporter Noelle Crombie writes for The Oregonian. Medical marijuana will remain tax free.
Recreational sales have been tax free since they began on October 1st of this year. The sales tax that will begin January 4th extends to the end of 2016. The state expects to collect between $2 and $3 million in 2016.
The Oregon Liquor Control Commission, which regulates the state’s recreational market, is expected to begin licensing rec-only stores near the end of 2016. Once these stores are functional, the 25% tax will drop permanently to 17%.
Because cannabis remains illegal under federal law, most banking services are off-limits to marijuana retailers. Stores will have to transmit tax revenues in cash, but the Oregon Department of Revenue says it is prepared to deal safely with the large volumes of cash expected, which will be collected each month. The department has added cameras, trained employees, and set up a special “cash handling location.”
Revenue from marijuana sales will be divided as follows: 40% will go to the common school fund, 20% for mental health, alcoholism and drug services, 15% to the state police, 10% to city law enforcement, 10% for county law enforcement, and 5% for the Oregon Health Authority’s alcohol and drug abuse prevention, intervention and treatment programs.
Photo Credit: Tax Credits