Pubdate: Tue, 09 Jun 2015
Source: Oregonian, The (Portland, OR)
Copyright: 2015 The Oregonian
Author: Jeff Mapes


Legislative negotiators have tentatively agreed on a sweeping 
marijuana deal that could produce a 20 percent sales tax on 
recreational sales of pot.

Under the deal -- which is still subject to change -- the state could 
collect a 17 percent tax while localities could collect up to 3 percent.

The deal to allow local taxes is aimed at ending a standoff with 
cities and counties over just how much power they have to prohibit 
retail sales of both recreational and medical marijuana.

That issue has tied up legislation that would place new limits on 
medical marijuana growers, which is aimed at reducing black-market diversions.

In exchange for giving cities and counties a chance to get some new 
tax revenue from legalized marijuana, legislators are able to in 
essence put aside the issue of local control.  That issue is likely 
to be settled either by the courts or by a legislative work group 
charged with making a recommendation for the 2016 session.

"We are reaching conclusions on this and I'm very encouraged by the 
progress we have made," said Sen. Ginny Burdick, D-Portland and 
co-chair of the Legislature's marijuana panel. The deal was revealed 
in a series of amendments posted on the legislative website Monday afternoon.

Scott Winkels, the chief lobbyist for the League of Oregon Cities, 
said the tentative deal for a local tax of no more than 3 percent is not ideal.

"But getting the tax on the books, we view that as a victory," said Winkels.

The 3 percent would be on top of a state sales tax that legislators 
on the marijuana committee have been moving toward. It would replace 
a harvest tax on marijuana that was contained in the Measure 91 
initiative approved by voters last November.

"Our intention in moving from the harvest to point of sale is not to 
change the quantity of tax" charged to consumers, said Rep. Ann 
Lininger, D-Lake Oswego, the other co-chair of the Joint Committee on 
Measure 91 Implementation.

Measure 91 also levied a harvest tax of $35 an ounce on flowers, the 
most potent part of marijuana, $10 an ounce for leaves and $5 on 
immature plants.

But legislators on the panel instead have moved toward a sales tax, 
saying it would be more workable. For one, this would allow medical 
marijuana  which the state does not plan to tax  to be sold at the 
same retail location as recreational marijuana.

Legislators are trying to figure out what sales tax rate would 
produce the same amount of revenue as a harvest tax. Mazen Malik, an 
economist for the Legislative Revenue Office, said 17 percent has 
been included in draft legislation as a "reasonable rate," but no 
final determination has been made on whether it is indeed equivalent 
to the harvest tax.

Measure 91 also said that only the state could tax recreational sales 
of the drug. But some 70 cities approved ordinances before the 
November election seeking to create a local pot tax.

Under the proposed deal, any local tax would have to be approved by 
voters in a city or county.

A key legal case involving Cave Junction is already testing whether 
local governments can prohibit medical marijuana dispensaries, 
Winkels said. A state law allowing cities and counties to put a 
one-year moratorium on dispensaries expired on May 1 and legislators 
have argued over what kind of authority to give localities.

A measure that passed the Senate said localities could prohibit 
dispensaries but gave local voters a way to overturn the ban. House 
members of the marijuana committee have pushed their own proposal 
requiring that any local ban go to voters.

Under Measure 91, only local voters could prohibit recreational 
marijuana sales in a specific city or county.

The latest amendments released by the committee also remove language 
that would call for a temporary recreational marijuana sales program 
starting soon after possession becomes legal on July 1.

Instead, Burdick and Lininger said they expect that contentious issue 
to be placed in a separate bill. They are considering a proposal to 
allow recreational users to buy a limited quantity of marijuana at 
medical marijuana dispensaries starting around Oct. 1.

The Oregon Liquor Control Commission, which is charged under Measure 
91, with regulating recreational sales, said it won't be ready to 
allow retailers to open until the last half of 2016. The commission's 
chairman, Rob Patridge, has argued against allowing early sales.
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MAP posted-by: Jay Bergstrom