A Tax Break on Medical Marijuana? It’s not yet a Done Deal for Patients in California

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Recent marijuana developments in California have seen medical marijuana patients enjoy tax relief on their marijuana products. However, it looks like this tax break will not last for long as debates around the issue continue. State leaders are on the forefront seeking to reverse this recent ruling that allowed marijuana patients not to pay any taxes. According to the state leaders, the state would lose millions of money on annual basis if that ruling is not reverted. In a bid to make sure that the state does not lose this money, the leaders are seeking to have a legislative fix through the Attorney General. Led by Fiona Ma, the chairperson of the Board of Equalization, the leaders are looking for a more definitive ruling that will make sure that the state gains from all proceeds coming from the sale of marijuana.

The state board had sent notice to anyone with a recommendation from a doctor to use marijuana not to pay taxes. Therefore, any person in possession of a county-issued marijuana card classifying them as a patient was free from making any other payments after paying for their weed. These reforms targeting marijuana patients were largely influenced by the changes that came in with Proposition 64 that was passed during the 2016 elections. However, there seems to be some discontent coming from the state leadership. Leaders believe that it is not a wise idea to let medical cannabis patients go free without paying taxes. The already established medical marijuana regulations for patients are believed to be enough to help them use marijuana for their health condition. Proposition 64 was a big win for the advocates of marijuana reforms because Californians can now use marijuana for recreational purposes. However, it was not all about using cannabis for pleasure: marijuana for medical reasons was also addressed through it. However, the latest tax break may seem to destabilize these reforms should the state feel that it’s becoming more of a burden to the government.

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The decriminalization of marijuana and its use was largely voted in for different reasons. For one, it was a big win for the users who don’t have to worry about smoking weed as long as they abide by the stipulated laws and regulations. On the part of the authorities, marijuana was a big business believed to accrue a lot of financial benefits to the state. Therefore, the opponents of the recently enacted bill requiring medical cannabis patients not to pay taxes feel that it is a big blow to one of the reasons that prompted some to support marijuana legalization. In this measure, all marijuana sales coming from both medical and recreational weed were supposed to include an excise tax of 15% beginning from January 1, 2018. However, the initiative let off medical weed patients in possession of county ID cards from paying the regular sales tax imposed by the state. This regular tax is in the range of 7.5-10% in all the cities in of California.

From the look of things, there seems to be a loop hole. Ideally, Proposition 64 did not define when the reduction of the sales tax for medical cannabis patients in California would be implemented. Some of the State Board of Equalization staff members were explicitly opposed to Proposition 64. Led by this group, the State Board of Equalization made a ruling that the exemption of medical marijuana patients from paying taxes started to work for them from November 9, 2016. However, this was not a welcome decision by those who drafted Proposition 64. According to them, this was a ridiculous decision. They further reiterated that the ruling seeking to free medical marijuana patients from paying taxes was a direct contradiction to the measures taken with the intent of generating state revenue from tax imposed on marijuana.

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The chairperson of the Board of Equalization, Ma said that the tax exemption for the marijuana patients was not intended to begin until the 15% excise duty was in force. This was the measure that was taken to make sure that the state will not lose any revenue. Working along with other advocates of Proposition 64 and state leaders, Ma said that they are pushing for changes on the policy. A spokesman for Governor Jerry Brown however, did not comment on the Board of Equalization. On the other side of things, Ma believed that the tax relief would end suddenly should the Attorney General weigh in. Again, she said that if they had to wait for the State Senate and State Assembly to address the matter, even with this emergency bill, this could go up to the next legislative period starting in January 2017.

The good news for medical marijuana patients on this tax break may therefore be short-lived should the decision to reverse the law take effect. Until then, patients can only hope that the new propositions will not adversely affect them.

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Comments (2)

  1. Avatar for talwar chirag talwar chirag November 26, 2016 / 1:46 pm / Reply

    The good news for us. completely agree with this. this is great news for medical marijuana patients on this tax break.

  2. Avatar for sweta devendra sweta devendra November 27, 2016 / 12:08 am / Reply

    Word up, heard this breaking news here.

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