{"id":69417,"date":"2023-10-18T07:28:16","date_gmt":"2023-10-18T15:28:16","guid":{"rendered":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2023\/10\/18\/missouri-marijuana-businesses-sue-over-stacked-local-and-county-taxes\/"},"modified":"2023-10-18T19:46:34","modified_gmt":"2023-10-19T03:46:34","slug":"missouri-marijuana-businesses-sue-over-stacked-local-and-county-taxes","status":"publish","type":"post","link":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2023\/10\/18\/missouri-marijuana-businesses-sue-over-stacked-local-and-county-taxes\/","title":{"rendered":"Missouri Marijuana Businesses Sue Over \u2018Stacked\u2019 Local And County Taxes"},"content":{"rendered":"<\/p>\n

\u201cIt equates to approximately $3 million a month that Missouri cannabis customers are being forced to pay when that is not what the constitution says.\u201d<\/em><\/p>\n

By Rudi Keller, Missouri Independent<\/strong><\/p>\n

Marijuana prices rose in many parts of Missouri on October 1 as new local taxes\u00a0took effect<\/a>. Lawsuits filed in Buchanan and St. Louis counties argue that some of those taxes are illegal.<\/p>\n

The constitutional amendment that legalized recreational cannabis sales included a 6 percent statewide excise tax and authorized local governments to charge a sales tax of up to 3 percent. The question now before the courts is whether the local taxes can be \u201cstacked,\u201d meaning a dispensary within the boundaries of an incorporated city must collect both a county-imposed tax and a tax authorized by a vote in the municipality, or if only the city tax applies.<\/p>\n

In an October 10 news release announcing the St. Louis lawsuit, the Missouri Cannabis Trade Association called the effort to collect both an \u201cunconstitutional money grab\u201d that violates the terms of the amendment passed in November.<\/p>\n

\u201cToday\u2019s lawsuit should eventually put an end to Missouri adult-use marijuana customers having to pay stacked local taxes, which violate the Missouri Constitution and the will of the voters,\u201d said Andrew Mullins, MoCann\u2019s executive director.<\/p>\n

Missourians are spending about $100 million a month on recreational marijuana, said Jack Cardetti, spokesman for the trade association. About three dozen counties have passed a local tax and the state Department of Revenue, which collects the tax for local entities, has notified dispensaries where a city and county tax is in effect that both levies must be charged.<\/p>\n

\u201cIt equates to approximately $3 million a month that Missouri cannabis customers are being forced to pay when that is not what the constitution says,\u201d Cardetti said.<\/p>\n

Counties believe they have authority under the constitution to impose the tax, said Steve Hobbs, executive director of the Missouri Association of Counties.<\/p>\n

\u201cIt is a very minimal amount and I think the law is very clear that the counties have the ability to do this,\u201d Hobbs said.<\/p>\n

Drafters of the amendment legalizing marijuana wanted to prevent stacking, so they used the\u00a0broad term \u201clocal government\u201d\u00a0for the entity authorized to impose a tax. To make it apply to both cities and counties, the term was defined as meaning \u201ca village, town, or city\u201d for incorporated areas and applying to counties only for unincorporated places.<\/p>\n

All dispensaries, whether selling marijuana for medical or recreational use, pay regular sales taxes. The full rate is the stacked combination of the 4.225 percent state tax and any local taxes, with retailers charging both county and city sales taxes at locations within municipal boundaries.<\/p>\n

Users of medical marijuana pay an additional 4 percent that goes for state purposes and there is no authority for an extra local tax. Recreational users pay the standard sales tax, plus the 6 percent state tax and, where authorized by voters, 3 percent for local government programs.<\/p>\n

Robust Missouri 3 LLC, operator of a dispensary in Florissant,\u00a0sued<\/a> after it was notified by the Department of Revenue that its sales tax rate for recreational marijuana sales would be 14.988 percent. That is the regular tax rate of 8.988 percent in Florissant plus the city and county marijuana sales tax.<\/p>\n

Robust is suing the Department of Revenue and St. Louis County, seeking a court order blocking collection of the county tax.<\/p>\n

The Department of Revenue declined to comment on the litigation.<\/p>\n

If an injunction is not issued, the lawsuit states, Robust \u201cwill suffer irreparable harm by being required to collect sales tax from its customers above what is authorized by Article XIV of the Missouri Constitution, thereby permanently damaging those customer relationships.\u201d<\/p>\n

In Buchanan County, St. Joseph dispensary Vertical Enterprises\u00a0sued<\/a> Buchanan County Collector Peggy Campbell, arguing that it, too, would be \u201cirreparably harmed\u201d if both taxes were imposed.<\/p>\n

Both lawsuits are in their early stages. A hearing to set a trial date for the Buchanan County case is scheduled for early December.<\/p>\n

In the St. Louis case, Robust filed exhibits showing the revenue department has given conflicting guidance to local governments on the issue of stacking. In one notice from the Taxation Division, issued in February, the department said the constitution prohibits stacking the local marijuana taxes.<\/p>\n

Both cities and counties can ask voters to authorize the tax, the notice states.<\/p>\n

\u201cHowever, the tax collected from a customer is limited to the percentage passed and is based on the location of the recreational marijuana business [facility] and depends on if that facility is in an incorporated or unincorporated area,\u201d the notice states.<\/p>\n

Later in the same month, the department reversed that guidance. The new notice from the Taxation Division stated that the section of the constitution authorizing the tax states that any successful tax vote is applicable to the \u201cpolitical subdivision\u201d where it was enacted.<\/p>\n

The amendment did not define \u201cpolitical subdivision,\u201d the new notice stated.<\/p>\n

\u201cThe distinction between local government and political subdivision is important as voters in the entire county will authorize the additional tax, not just voters in the unincorporated area,\u201d the notice stated. \u201cAnd practically, counties do not otherwise limit the applicability of their sales taxes based on geography.\u201d<\/p>\n

The Missouri Association of Counties lobbied for the revised guidance, Hobbs said.<\/p>\n

\u201cWe had a discussion with them on why we felt like the ballot language, and the way it was worded, absolutely allowed the counties to put that tax on,\u201d he said.<\/p>\n

Counties should enjoy the new revenue from dispensaries located outside municipalities and the standard sales tax generated by all dispensaries within a county, Cardetti said.<\/p>\n

\u201cThey are getting a portion of the sales because they are subject to the same sales tax as any other product,\u201d he said.<\/p>\n

Members of the trade association will collect both city and county marijuana taxes until the courts rule on stacking, Cardetti said.<\/p>\n

How money would be refunded if the courts agree with the dispensaries is uncertain, he said.<\/p>\n

\u201cIt is too early to tell,\u201d he said. \u201cI expect the order from the courts will be specific on that.\u201d<\/p>\n

This story was first published by Missouri Independent.<\/a><\/p>\n

\n

FBI Report Says 3 In 10 Drug Arrests Are For Marijuana, But Agency\u2019s Inconsistent Data Hinders Policy Analysis<\/a><\/p>\n<\/blockquote>\n

\n

The post Missouri Marijuana Businesses Sue Over \u2018Stacked\u2019 Local And County Taxes<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n


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\nRead More: Missouri Marijuana Businesses Sue Over \u2018Stacked\u2019 Local And County Taxes<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cIt equates to approximately $3 million a month that Missouri cannabis customers are being forced to pay when that is not what the constitution says.\u201d By Rudi Keller, Missouri Independent Marijuana prices rose in many parts of Missouri on October 1 as new local taxes\u00a0took effect. Lawsuits filed in BuchananContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":457,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[81],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/69417"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/457"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=69417"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/69417\/revisions"}],"predecessor-version":[{"id":69418,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/69417\/revisions\/69418"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=69417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=69417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=69417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}