New York State Lawmakers Want To Significantly Increase Marijuana Tax

Lawmakers in New York want to increase the sales tax on adult-use recreational marijuana and it's a pretty big increase. A new bill, sponsored by State Senator Jeremy A. Cooney and State Assemblymember Crystal Peoples-Stokes, would change to amount and way cannabis is taxed in NY.

The bill, S4831/A4619,

Increases the tax from nine to sixteen percent of the amount charged for the sale or transfer of adult-use cannabis products to a retail customer.

There are also taxes based on THC content:

- five-tenths of one cent (.005) per milligram of the amount of total THC for cannabis flower
- eight-tenths of one cent (.008) per milligram of the amount of total THC for concentrated cannabis
- three cents (.03) per milligram of the amount of total THC for cannabis edible product

The tax, which is currently at 9 percent, would increase by 7 percent to 16 percent. This 16 percent tax would occur during the sale of marijuana to a customer by a retail business. The tax would be on top of any other taxes,

In addition to any other tax imposed by this chapter or other law, there is hereby imposed a tax of [nine] SIXTEEN percent of the amount charged for the sale or transfer of adult-use cannabis products to a retail customer by a person who sells adult-use cannabis products at retail. This tax is imposed on the person who sells adult-use cannabis at retail and shall accrue at the time of such sale or transfer.

The wording of the first sentence of the bill's purpose leads me to believe that in addition to the 16 percent, a 4 percent local tax would still apply (see the current sales tax structure below).

Peoples-Stokes, who is the sponsor of the Assembly version of the bill told Spectrum News,

As the state continues to build out licensed cannabis operations, a simpler tax structure will be better for businesses and consumers. This new tax approach will ultimately lead to thriving cannabis businesses at all levels of the supply chain. We will see higher tax revenues, which will result in more funds being reinvested in communities and invested in education and other important programs.

 

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What Is New York State's Current Sales Tax On Marijuana?

New York predicts that the adult-use cannabis industry will generate millions, possibly billions of dollars in revenue for the state from taxes and other fees. The state's taxation plan aims to make sure it maximizes the legalization of marijuana. In addition to taxing distributors of adult-use marijuana products in the state, there are two taxes that consumers will pay. These taxes will be active soon, once the first legal retail dispensaries and lounges open,

There is a state excise tax imposed on the sale of cannabis products by a retail dispensary to a cannabis consumer at 9 percent of the products’ price.

 

There is a local excise tax imposed on the sale of cannabis products by a retail dispensary to a cannabis consumer at four (4) percent of the products’ price. This tax is distributed to local governments based on where the retail dispensary is located.

The current total sales tax on recreational cannabis sales in New York is 13 percent.

If you make retail sales of adult-use cannabis products, a retail tax of 13% on the amount charged for the sale or transfer is imposed.