Local Taxes Lawsuits: What You Need to Know
Hey there, fellow cannabis enthusiasts! Today, we’re diving into a hot topic that’s been buzzing around the cannabis community – Local Taxes Lawsuits. It might sound a bit dry at first, but trust me, there’s more to it than meets the eye. So, grab your favorite strain, roll one up, and let’s get into the nitty-gritty of this issue.
Understanding Local Taxes
First things first, let’s break it down. You know how when you purchase your favorite cannabis products, you’re already paying taxes on them? Well, that’s not all of it. In Missouri, there’s this thing called “stacked” local taxes, and some folks in the Show-Me State are saying, “Hold on, that’s not cool.”
The deal is, when you buy cannabis in Missouri, you’re hit with a statewide excise tax of 6 percent, and local governments can add up to an additional 3 percent in sales tax. Now, the question on the table is whether these local taxes can be “stacked.” That means if you’re buying your stash in an incorporated city, you might end up paying both a county-imposed tax and a city tax. Ouch, right?
The Fight Against “Unconstitutional Money Grab”
Enter the heroes of this story: cannabis businesses and advocates who are taking this issue to court. They’re saying that collecting both these taxes is nothing short of an “unconstitutional money grab.” And you know what? They’ve got a point!
In October 2023, lawsuits were filed in Buchanan and St. Louis counties challenging the legality of these taxes. The Missouri Cannabis Trade Association is leading the charge, and they’re not pulling any punches. They argue that stacking these local taxes goes against the Missouri Constitution and the will of the voters who approved recreational cannabis.
Jack Cardetti, a spokesperson for the trade association, dropped a bombshell – Missourians are shelling out approximately $3 million a month due to these stacked local taxes. That’s a lot of green going toward something that might not be legit!
The Legal Tug-of-War
Now, let’s get into the legal nitty-gritty. Counties are claiming that they have the authority under the constitution to impose these taxes. Steve Hobbs, the executive director of the Missouri Association of Counties, seems pretty confident about it.
But here’s the catch: the folks who drafted the amendment to legalize marijuana wanted to prevent stacking. So, they used the term “local government” without specifying whether it includes cities or counties. Sneaky, right? For incorporated areas, it means cities, and for unincorporated places, it’s just counties. But hey, the devil’s in the details.
The Money Matters
Okay, let’s talk cash. All dispensaries, whether they’re selling medical or recreational marijuana, are already paying regular sales taxes. That’s the 4.225 percent state tax plus any local taxes. It’s like a double whammy for your wallet.
Medical marijuana users are hit with an additional 4 percent tax for state purposes, but there’s no extra local tax for them. Recreational users, on the other hand, get the standard sales tax, the 6 percent state tax, and an extra 3 percent if the voters gave it the green light for local government programs. Phew, that’s a lot of math for a chill session.
Lawsuits in Action
So, who’s taking the fight to court? Robust Missouri 3 LLC, the operator of a dispensary in Florissant, isn’t backing down. When they were told their sales tax rate for recreational marijuana would be a whopping 14.988 percent, they said, “Enough is enough.” They’re suing the Department of Revenue and St. Louis County to block the county tax.
Then there’s Buchanan County, where St. Joseph dispensary Vertical Enterprises is also throwing their hat into the ring. They’re making the same argument – getting hit with both taxes would be downright harmful.
Both lawsuits are still in their early stages, with a hearing to set a trial date for the Buchanan County case scheduled for early December. It’s like a courtroom drama, but with a cannabis twist.
The Flip-Flopping Guidance
Now, here’s where it gets interesting. Robust, the dispensary in Florissant, dug up some conflicting guidance from the Department of Revenue. In one notice from February, it stated that the constitution doesn’t allow stacking these local marijuana taxes. But hold your horses; it later reversed that stance in the same month.
The new notice claimed that the section of the constitution authorizing the tax applies to the “political subdivision” where it was enacted. And guess what? The amendment didn’t bother defining “political subdivision.” Sneaky, right?
The Counties’ Perspective
The Missouri Association of Counties played a role in this flip-flopping guidance. They argued that the counties had the right to slap on that extra tax. It’s all about that ballot language, they said. And counties are eyeing that new revenue from dispensaries located outside municipalities and the standard sales tax generated by all dispensaries within the county.
What’s Next?
So, where do we go from here? Well, it’s a waiting game. Members of the trade association are continuing to collect both city and county marijuana taxes until the courts make their decision. As for refunds, that’s still up in the air. We’ll have to wait for the courts to weigh in on that too.
In the meantime, the cannabis community in Missouri is holding its breath, hoping for a resolution that makes sense. After all, no one likes getting hit with unexpected taxes, especially when they’re enjoying a little relaxation with their favorite herb.
And there you have it, folks – the lowdown on the Local Taxes Lawsuits in Missouri. Stay tuned for updates because this is one cannabis story that’s far from over.
Thanks to Rudi Keller of Missouri Independent for reporting on this issue.
Now, go ahead and light up that joint, and let’s keep our fingers crossed for a fair resolution to this tax tangle. Happy toking!
