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Massachusetts House Proposes a 28% Recreational Marijuana Sales Tax

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Massachusetts hoped to make a compromise on revisions to its voter-approved recreational marijuana legislation. While some compromises were made, some differences still remain. The House and Senate both proposed different options regarding taxes and local control.

The House bill sets a hefty tax on recreational marijuana sales at 28-percent, according to NECN. The Senate’s proposed tax rate is 12-percent, which is the figure represented in the current law. Representative Mark Cusack says the House’s proposed rate is justified because of the unknowns associated with the implementation and regulation of recreational marijuana in the state.

Cusack said, “It’s always easier up here on Beacon Hill to be for a tax cut than a tax increase. That’s why you want to start high and you can always bring it down. That’s what other states have done.”

Washington state has the highest recreational marijuana tax in the country at 37-percent. Colorado follows behind at 27.9-percent and Oregon’s tax rate is now 17-percent.

In the House version of the bill, critics say starting low and increasing later is an option. They believe starting with a high tax rate would maintain the state’s black market. There are a few Democrats on board with a higher starting tax rate.

Senator Linda Dorcena Forry said, “We don’t want to be extreme and go too far, but I do believe 12-percent is too low. Twenty-eight percent is too high. So we have to come to a place in the middle.”

Senator Dorcena Forry wants some of the tax revenues to be used for programs to help minorities get started in the marijuana industry.

Other differences include how much local power should be given in terms of local regulation including the power to ban recreational marijuana shops. There’s not much room to move in either direction, but Cusack is confident that a compromise will be reached.

Further discussions to work toward a compromise are scheduled for later this week where negotiations will be needed to make final decisions on taxes and other recreational marijuana rules.