Marijuana Tax Cut Could Be in Jeopardy as Revenue Lags Behind Budget Projections
Money collected through California’s marijuana taxes may fall short of the $175 million budgeted for the first six months of this year. The less-than-expected haul could force the Legislature to shelve a bill that would reduce the excise tax on pot from 15% to 11%, state officials warned Tuesday.
For the first three months of the year, the state collected $34 million in state excise taxes on cannabis. If the trend continues, revenue will be less than half of what was anticipated for the first six months, according to the Legislative Analyst’s Office.
“We’re not seeing the numbers” expected, said Assemblyman Evan Low (D-Campbell), chairman of the Assembly Business and Professions Committee. Tax revenue, he added is “woefully below the projections.”
A proposal to reduce the excise tax and postpone a growers’ tax until 2021 was recommended Tuesday by the panel as a way of allowing businesses that get state licenses to better compete against the state’s large illicit market, which does not pay taxes.
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