How High Are Taxes on Recreational Marijuana in Your State?
Feb 08, †∑ Generally, all corporations operating in Massachusetts, both foreign and domestic, need to pay corporate excise tax. This guide has information about corporate excise tax, from calculating the tax, to credits and deductions, to apportioning income. It provides general information about Massachusetts tax laws and Department of Revenue policies and procedures. The Massachusetts sales tax rate is % as of , and no local sales tax is collected in addition to the MA state tax. Exemptions to the Massachusetts sales tax will vary by state.
As the public grows more supportive of recreational marijuana, states deciding to legalize it must figure out their approach toward taxing cannabis sales. Eleven states Alaska, California, Colorado, Illinois, Maine, Michigan, Massachusetts, Nevada, Oregon, Vermont, and Washington and the District of Columbia have legalized the use and possession of recreational marijuana, but only nine of these jurisdictions have established legal markets for the substance.
How to enroll for phd in management legalized recreational marijuana in and plans to implement a legal market later this year. Similarly, Vermont legalized the substance in earlyalthough the state is still in the process of setting up a legal market and taxing regime.
The map below highlights the states that have legal markets and levy taxes on recreational marijuana. As the map suggests, states have chosen many different methods for taxing marijuana. The multitude of approaches makes any apples-to-apples comparison of rates difficult. Of the states with legal markets, all but Alaska, Oregon, and Colorado levy the general sales tax on marijuana sales in addition to excise taxes. Alaska and Oregon do not levy a statewide general sales tax in the first place, and Colorado levies a 15 percent special sales tax in place of its general rate.
Washington has the highest statewide retail-level excise tax, at 37 percent. While states differ widely in practice, there are several basic guidelines they should follow when structuring excise taxes on recreational marijuana.
These taxes should be levied to target the externalities, not as a general fund revenue tool. Low tax rates better allow conversion from the illicit market but could encourage consumption by minors and non-users. Taxes based on price, weight, and potency all have their own trade-offs, although a potency- and weight-based tax on THC levels may be the best short-term option.
For more discussion on the trade-offs of marijuana tax structures, see our recent report. The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work? We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better? Follow Janelle Cammenga.
A sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadeningsuch as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. An excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied what to do in fallout new vegas when bored cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and make up a relatively small and volatile portion of state and local tax collections.
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How to get a Hawaii General Excise Tax (GET) License
Jan 04, †∑ If you plan to file an abatement, itís a good idea to pay your excise tax. If you donít pay your excise bill and we deny your abatement, you will have to pay any late fees and penalties. A motor vehicle excise payment is due 30 days after we issue the bill. A boat excise payment is due 60 days after we issue the bill. STILL HAVE QUESTIONS? May 06, †∑ When you register your motor vehicle or trailer, you have to pay a motor vehicle and trailer excise. Get the ins and outs on paying the motor vehicle excise tax to your city or town hall. This guide is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts. The Massachusetts (MA) state sales tax rate is currently %. Sales tax is a tax paid to a governing body (state or local) for the sale of certain goods and services. First enacted in the United States in , sales tax dates back to ancient Egyptian times where paintings depict the collection of tax .
An excise tax is a tax directly levied on certain goods by a state or federal government. The most prominent excise taxes collected by the Washington state government are the fuel tax on gasoline and the so-called "sin tax" collected on cigarettes and alcoholic beverages. Washington's excise taxes, on the other hand, are flat per-unit taxes that must be paid directly to the Washington government by the merchant before the goods can be sold.
Merchants may be required to attach tax stamps to taxable merchandise to show that the excise tax was paid. Even though excise taxes are collected from businesses, virtually all Washington merchants pass on the excise tax to the customer through higher prices for the taxed goods. Washington collects general excise taxes on the sale of motor fuel gasoline and diesel , cigarettes per pack , and cell phone service plans. Other general taxes, similar to excise taxes, may be collected on other items including firearms , vehicle sales , tanning salons , transportation tickets , gas guzzlers , and more.
The Washington excise tax on gasoline is Washington's excise tax on gasoline is ranked 7 out of the 50 states. The Washington gas tax is included in the pump price at all gas stations in Washington. Washington's excise tax on cigarettes is ranked 6 out of the 50 states.
If a pack contains more then 20 cigarettes, a higher excise tax will be collected. Washington's average cellphone tax is ranked 2 out of the 50 states. The Washington cellphone tax is already included in the service plan price you pay to your service provider, and may be listed as "Misc.
Washington collects a registration fee and a title fee on the sale or transfer of cars and motorcycles, which are essentially renamed excise taxes. Unlike standard excise taxes, however, the end consumer must pay the tax directly to the Washington Department of Transportation and receive documentation registration and title papers proving the fees were paid.
Washington collects special excise taxes on the sale of all types of alcohol, subdivided into specific taxes on wine, beer, and liquor hard alcohol other then wine and beer.
Alcohol taxes are sometimes collectively referred to as "sin taxes", which also include excise taxes on cigarettes, gambling, drugs, and certain other items. Please note that the IRS also collects a federal excise taxes on alcoholic beverages, which are included separately from Washington's alcohol taxes in the final purchase price.
Washington's beer excise tax is ranked 24 out of the 50 states. The Washington beer tax is already added to the purchase price of all beer bought in Washington, whether in kegs, bottles, or cans.
Washington's excise tax on wine is ranked 25 out of the 50 states. The Washington wine tax is already added to the purchase price of all wine bought in Washington. Washington's excise tax on Spirits is ranked 1 out of the 50 states. The Washington liquor tax applies to all hard alcohol alchoholic beverages other then beer and wine , and is already included in the purchase price by the retailer.
Unlike the Washington Sales Tax , excise taxes are not generally deductible on Washington income tax returns or on your federal tax return. However, the IRS occasionally allows certain excise taxes to be deducted for certain tax years. Vehicle Tax Deduction Washington sales and excise taxes on cars or vehicles bought during may be deducted once from your federal tax return. You cannot deduct excise taxes for vehicles bought during other years.
Phone Tax Deduction You may deduct excise taxes paid on long-distance phone calls between the years of and from your federal tax return.
While sales tax refunds are available for goods that are purchased in Washington and exported, Washington excise taxes paid on goods are generally non-refundable. Incentives may exist allowing certain state of federal excise taxes to be refunded on goods bought for specific uses, but such incentives change frequently. Try our FREE income tax calculator. Gasoline: What are Washington's Excise Taxes?
Washington Gas Tax 7th highest gas tax The Washington excise tax on gasoline is Washington Car Tax Washington collects a registration fee and a title fee on the sale or transfer of cars and motorcycles, which are essentially renamed excise taxes.
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