Pubdate: Sat, 26 Mar 2016
Source: Mail Tribune, The (Medford, OR)
Copyright: 2016 The Mail Tribune
Contact:  http://www.mailtribune.com/
Details: http://www.mapinc.org/media/642
Note: Only prints LTEs from within it's circulation area, 200 word count limit
Note: By Albany Democrat-Herald

FIRST POT TAX COLLECTIONS HIGHER THAN EXPECTED

This past January marked the first month that the state of Oregon 
collected taxes on the sale of recreational marijuana, marking 
another milestone in the state's unfolding experiment with legalized pot.

But it was the amount collected in taxes in January that raised 
eyebrows in Salem and around the state: The Oregon Department of 
Revenue pegged the amount at $3.8 million.

Let's put that number into perspective: Obviously, no one knew for 
sure what sort of sales would result from the voter-mandated decision 
to make recreational use of marijuana legal, so state economists 
admitted that their estimates were little more than guesses. But they 
figured that Oregon would collect somewhere between $3 million and $4 
million in tax revenue.

A year.

So, in other words, the amount of money collected in taxes from 
marijuana sales in January, just that one month, was equal to what 
experts were expecting for the entire year.

Now, it's true that the January figure might be an aberration: For 
one thing, the state has temporarily levied a 25 percent tax on 
recreational marijuana sales; eventually, after the Oregon Liquor 
Control Commission takes over regulation of recreational sales, the 
state tax will be 17 percent and local governments will be allowed to 
levy up to an additional 3 percent. So the 25 percent tax rate 
eventually will drop.

In addition, it's true that the state does not yet have a good feel 
for what the full price tag will be for regulating the marijuana market.

But the January tax number suggests that Oregon has a robust market 
going for recreational marijuana sales. And, perhaps even more 
important, the numbers suggest that, at least for the time being, pot 
consumers are turning to licensed locations and not the black market. 
(Legislators who were charged with working out the details of legal 
marijuana spent considerable time worried about how to keep the black 
market at bay, and at first glance, it appears that their efforts are 
paying off. In addition, legislation such as Rep. Andy Olson's recent 
House Bill 4094, which helps move the industry away from a cash-only 
basis, is increasingly important.)

The surprisingly large tax collection in January also could toss a 
new wrinkle into the election campaigns pending in jurisdictions that 
have decided to ban recreational sales. For example, officials in 
Linn County and a number of cities in the county have decided to ban 
sales of recreational pot - but voters need to weigh in on the matter 
in the November election.

One of the arguments that ban supporters have advanced is that sales 
of recreational pot won't generate much in the way of tax revenue for 
local governments.

It's true that local governments get a relatively small slice of the 
tax pie from marijuana sales: Under the law, dispensaries can keep 2 
percent of the tax to help cover the costs related to collection. The 
Revenue Department and the Liquor Commission keep some of the tax to 
cover their costs. After those costs are cleared, 40 percent goes to 
the state's Common School Fund, 20 percent goes to mental health, 
alcoholism and drug services, 15 percent to the Oregon State Police, 
10 percent for city law enforcement, 10 percent to county law 
enforcement and 5 percent to the Oregon Health Authority for alcohol 
and drug abuse prevention.

But now it looks as if the tax pie might be considerably bigger than 
first thought. Will that change the dynamics going into the November 
marijuana elections? It adds an intriguing new twist to Oregon's 
continuing marijuana saga.
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MAP posted-by: Jay Bergstrom