A proposal by Governor Malloy to legalize the palliative use of marijuana in certain circumstances could generate revenue if the bill passes and Connecticut decides to follow California’s lead. The sale of marijuana for medical purposes is legal in California and now the California State Board of Equalization (BOE) says those sales are taxable.
California, like Connecticut, taxes the retail sales of all tangible personal property not specifically exempted. California’s law has no exemption for medical marijuana but the Berkeley Patients Group, Inc. argued that the sales were covered by the state’s exemption for medicine. Not so, the BOE ruled. Berkeley owes the state more than $6.4 million in back sales tax, penalties, and interest. California’s sales tax rate is 8.25%.
Illegal sales of marijuana in Connecticut are already subject to an excise tax of $3.50 cents per gram. But, so far, the state hasn’t gotten any revenue from that tax, which was enacted in 1991.
