Medical pot users to pay sales tax

Posted April 09, 2010, at 7:28 p.m.

AUGUSTA, Maine — Included in the final catch-all tax bill signed into law Friday by Gov. John Baldacci is a provision that taxes the sale of medical marijuana at state-sanctioned dispensaries.

“We wanted to make sure that it is taxed,” Rep. Thomas Watson, D-Bath, co-chairman of the Legislature’s Taxation Committee, told members of the Appropriations Committee in the final review of the tax bill on Wednesday. “It is one of the recommendations of Maine Revenue Service that we didn’t follow. They recommended it not be taxed, but the committee — all that were in the room, both parties — said it should be taxed.”

The decision is estimated to result in about $71,000 a year in additional sales tax revenue. Sen. Richard Nass, R-Acton, said lawmakers on the committee rejected the Maine Revenue Service position that marijuana used for medical reasons was the same as a prescription drug.

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“They wanted to exempt it from the tax because they considered it to be medicine,” he said. “We discussed it for about an hour and decided to go in a different direction and make it clear it should be taxed.”

Nass said that when he took the issue to the GOP caucus, there was no objection to the tax, even though the caucus generally has been opposed to any tax increases.

“There was no cheering, but no one was upset,” he said.

Sen. Joseph Perry, D-Bangor, co-chairman of the Taxation Committee, said the panel wrestled with the tax issue.

The state has long taxed the sale of medications that do not require a prescription. He said the system established in the new medical marijuana law requires a doctor to find a person’s medical condition could be helped by using the drug, but does not require a prescription.

“It is helpful to people who need it and want it, but it is not a prescription medicine,” he said. “Once we got to that, we decided it should be taxed.”

Perry said the amount of revenue the tax will generate is a “guess” because no one is sure how many Mainers will use the new law once the state-sanctioned medical marijuana dispensaries are operating. Supporters of the referendum say the eight dispensaries authorized in the law signed this week are not enough.

“We will need more, and I think a lot more,” said Jonathan Leavitt, executive director of the Maine Marijuana Policy Initiative, the group that ran the petition drive to put the question on the ballot.

He said he was neither surprised nor upset at the decision to tax marijuana.

“Everybody down there has dollar signs in their eyes,” he said. “Everything is about money.”

Perry said there are concerns among lawmakers about paying for the oversight of the new marijuana law. There are a number of fees assessed to users of the new system as well as a licensing fee for dispensaries of between $5,000 and $15,000 a year.

“There is an awful lot of money there,” he said. “There is also a lot of potential for misuse. So yes, we should tax it and use some of that money to make sure it is regulated properly.”

Leavitt rejects the need for a complex oversight system, such as that for prescription drug sales. He said that marijuana is “an incredibly benign plant” and is not like manufactured drugs that often have serious side effects.

“This should be about helping people, not law enforcement,” he said.

Leavitt said taxing marijuana sales may have the result of helping supporters in the future as the state starts getting new revenue.

“On one level, it will help us entrench this issue,” he said. “But I don’t think there are a lot of us too happy with the way our tax dollars are being spent by either the state or the federal government.”

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