Sitka’s marijuana advisory committee doesn’t want to impose excise taxes on the now-legal drug – at least, not right now. While no firm recommendations were made at a meeting earlier this week, several members spoke in support of leaving taxes off the table.
The Committee is mulling over an excise tax on marijuana and related-products, like edibles. Excise taxes are fees levied on the process of getting the product to the store counter, generally paid to a city or municipality by a wholesaler.
The committee’s newest member, Jay Stelzenmuller, floated the idea of imposing a one percent excise tax on marijuana. He proposed the revenue generated by the tax be divvied up to pay for city administration, public marijuana education and to defray the social costs of drug abuse.
The work group seemed to like the idea of dedicating money to specific purposes but not all of his proposals were welcomed. Here’s committee chairman Levi Albertson:
“I’m very much in favor of giving a large chunk of this possible excise tax to education. And I’ve heard not just in this motion but several folks speak to the idea of creating a marijuana education. I can’t get behind that. What we’re doing there is not shoring up our budget shortfalls. We’re creating a new place to spend money.”
Committee member Steven Eisenbeisz estimated the city could bring in an additional $250,000 in sales tax revenue from marijuana. And that is just an estimate. It’s too early to tell how much an excise tax would generate.
Here’s Albertson again:
“There’s way too much if coming off this industry right now for me to think now is the time to set an excise tax. The folks in the industry aren’t real sure what their costs are going to be. It’s quite easy for me to sit here and say I think tax is a good idea but I have no skin in the game.”
Committee member Joe D’Arienzo says an excise tax would be a sin tax, stigmatizing the drug. And member Darrell Windsor says marijuana should be treated like any other business.
“Any other new business in town coming in we wouldn’t put an excise tax on it. A florist starts her shop were not going to say we’re going to put an excise tax on you because you’re a florist,” he said. “If we’re going to treat this like any normal business, we should treat it like a normal business.”
Still, Stelzenmuller says marijuana has social implications and a one percent excise tax would be minimal, only $1 on $100.
“I see the point of not trying to raise the cost of marijuana because we need to get it down to get it off the black market but I think this would be a better way to go,” he said.
Others on the committee, like Eisenbeiz, were interested in having the ability to levy an excise tax in the future.
Sitka has an excise tax on cigarettes and tobacco-related products like chew. Wholesalers pay a $2.50 tax to the city per pack of cigarettes. The tobacco tax generates about half a million dollars per year.
The Marijuana Advisory committee is continuing to discuss topics like taxes, licensing and onsite consumption of marijuana. It will be making final recommendations to the Sitka Assembly for how pot will be regulated locally early next year.
