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HIGH TAXES

The Berkeley Patients Group should pay its back taxes, but the state should consider changing its policy for the future.

The fact that the Berkeley Patients Group owes approximately $6 million in back taxes and interest is merely an issue of failing to properly adhere to contemporary state requirements.

The collective has stated that they did not collect taxes because they consider medical marijuana to be a type of medicine, and prescription medication is not taxed.  They contend that they were only liable to pay taxes starting in 2007, when the state specifically stated that all marijuana dispensaries must take out seller's permits and report their proceeds.

We disagree with the dispensary and believe that they should be liable for the taxes.  Medical marijuana has always occupied a separate category from medicine dispensed by pharmacies, and it makes sense for it to have always occupied a separate tax category.  If the dispensary were honestly unsure of whether they were responsible for paying taxes, they could have clarified that with the California State Board of Equilization.

Instead, they rolled the dice - and most likely lost.  The board has already ruled that the collective's stated reason was not a valid argument for not paying taxes, when the board decided in Sept.  2010 that the Patients Care Collective owed over $600,000 in back taxes from as long ago as 2005.

Unfortunately for the dispensary and others like it, the consequences for unpaid taxes are steep - especially for the patients who rely on the dispensaries.  Huge tax liabilities put the dispensaries at risk of closure, and without them, patients with legitimate prescriptions are unable to purchase their medical marijuana.

For the future, the state should consider exempting physician-prescribed medical marijuana from the collection of taxes.  By not doing so, the state is placing the tax burden on patients.  But until they do, dispensaries must obey the law - or else face high costs.