In 2021, adult-use hashish excise taxes in Arizona reeled in $105 million, surpassing alcohol excise taxes of $92 million, in line with an Institute of Taxation and Economic Policy (ITEP) report. ITEP, a nonpartisan and nonprofit tax coverage group, added that since leisure hashish legalization in sure states, corresponding to Arizona in November 2020, “revenue has tended to start low but grow quickly as legal businesses ramp up production and sales.”
In January 2021, Arizona obtained $1.8 million in excise tax income; the next month, the Grand Canyon State collected $6.3 million.
Only Arizona adult-use hashish shoppers, or leisure customers, should pay a 16 p.c tax on each buy of marijuana and associated merchandise. Then there’s additionally the state’s 5.6 p.c gross sales tax and extra municipality taxes that fluctuate per metropolis and county, all bundled right into a transaction privilege tax (TPT).
“Being in the town of Guadalupe, we pay an additional 4 percent on top of the 5.6 percent state tax,” mentioned Raul Molina, co-founder and COO of The Mint Cannabis.
The Arizona Department of Revenue explains that TPT is “actually a tax on a vendor for the privilege of doing business in the state. Various business activities are subject to transaction privilege tax and must be licensed.” The TPT tax is then handed on to the leisure hashish client who walks into Molina’s 12,000 square-foot dispensary.
Molina continued, “At our dispensary, you will pay about 26 percent total in taxes as an adult-use cannabis purchaser.”
But medical marijuana customers are exempt from the 16 p.c “sin tax” and solely pay the TPT taxes, “which are state, county and municipality taxes at about 9 to 10 percent,” Molina added.
Broken down: When anybody with a medical card walks into The Mint Cannabis at Baseline Road and Priest Drive and purchases $100 in hashish product — the overall value will probably be about $110; if the client doesn’t have a medical card, their fee will probably be about $125.
For an Arizona resident to get a medical marijuana card, the candidate should fill out a Medical Marijuana Program Qualifying Patient Checklist on the state’s Department of Health Services web site. Then with the guidelines, the candidate should present an Arizona DHS medical marijuana certification kind signed by a certified doctor stating the applicant has qualifying well being circumstances. There’s additionally a $150 affected person registry price, or $75 if the qualifying affected person makes use of SNAP (Supplemental Nutrition Assistance Program).
Downing, a former prosecutor based mostly in Phoenix, forewarns that if the taxes are too excessive, “people will start their own black market and gray market outside of the governments’ control, and they’ll need to be punished.” Which will lead to further taxpayers’ monies to watch, implement, and course of.
From January 2021 by February 2022, Arizona has collected greater than $261 million in mixed taxes: $73 million was derived from medical marijuana gross sales (TPT); $61 million from adult-use/leisure marijuana gross sales (TPT); and greater than $127 million from excise taxes.
“It shows what cannabis activists have been saying all along,” Molina concluded. “Tax is so everyone benefits — consumers or not.”