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Issue Briefs

Distribution of Marijuana Tax Revenue (2016)

Fiscal Policy & Taxes
Liquor, Tobacco, & Marijuana
State Revenue & Budget

This issue brief provides an overview of marijuana tax revenue. Three state taxes apply to marijuana, with medical and retail marijuana taxed differently. Both medical and retail marijuana are subject to the existing 2.9 percent state sales tax, which is applied to most purchases in the state. Additionally, retail marijuana is subject to a 10 percent sales tax, levied on retail sales, and a 15 percent excise tax, levied on the first transfer of marijuana from a wholesaler to a processor or retailer. The new taxes on retail marijuana were approved by voters with the passage of Proposition AA in 2013. Table 1 shows the state taxes that apply to medical and retail marijuana.

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details