Marijuana Tax Hike Could Go Up in Smoke
The Washington state legislature hiked taxes on marijuana, will the voters buy it on the ballot?
Washington State has a non-binding Advisory Question on this year’s ballot, Advisory Question 8: “Concerns Marijuana Excise Tax”. Advisory Question 8 deals with the state’s recently legalized marijuana industry, specifically, the state legislature’s decision to essentially deem the industry non-agricultural – exposing consumers to a higher tax burden than they would have with other agricultural products. All-in-all, consumers will face a $24.9 million tax increase over the next decade. The ballot language reads: “The legislature eliminated, without a vote of the people, agricultural excise tax preferences for various aspects of the marijuana industry, costing an estimated $24,903,000 in the first ten years, for government spending. This tax increase should be:
[ ] Repealed [ ] Maintained”
The Advisory Question was placed on the ballot after the passage of Senate Bill 6505. The legislation redefined the marijuana industry, declaring it non-agricultural, exposing consumers to higher taxes.
In Washington State, Advisory Questions were once part of a broader provision that was frequently enacted via initiative that required a two-thirds supermajority of the legislature to raise taxes. Tax increases could also be placed on the ballot for voter approval. The Advisory Question was the only provision to survive the state Supreme Court striking down the statute requiring a two-thirds supermajority of the legislature to increase taxes in 2013. The grounds for the decision were based on the argument that preventing tax hikes somehow prevented the “adequate” funding of education.
Advisory Question 8 will be an interesting issue to watch as Washington State voters have had a long streak of opposing tax increases.