Maine, Medical Marijuana and Sales Tax
- Sales Tax News
- Nov 8, 2011 | Susan McLain
It seems the sales tax issue regarding medical marijuana can get complicated. The Maine Revenue Service (MRS) is looking to increase the sales tax of marijuana brownies to the higher rate applied to restaurants and prepared food.
It is the MRS opinion that a food product containing medical marijuana cannot be considered a grocery staple as it isn’t consumed ordinarily for human nourishment and is merely an alternative form of delivering the medical marijuana to the body. Based on Maine Revenue Services interpretation of the current law, that means it is taxable at the higher rate. It is the opinion of Peter Beaulieu, director of the Sales, Fuel and Special Tax Division at Maine Revenue, that it would take legislative action to exempt medical marijuana from the higher sales tax rate.
This doesn’t go over so well. The flip-side argument is that the brownie is the delivery mechanism, much like encapsulated powdered medication into a pill, and should be exempted like other prescription medications. In addition to that argument, Paul McCarrier, board member of the Medical Marijuana Caregivers of Maine, says that “…for some individuals, eating foods that contain medical marijuana is the best way for them to use the medicine. He said smoking or using vaporizers does not work for everyone and patients should not have to pay an extra tax in order to use medicinal marijuana.”
It appears that where medical marijuana brownies sits within the sales tax sphere of definitions for the purpose of paying sales tax is being contested. Is it a food item? Is it a prescription medication (with a unique delivery method)? Or is it to be considered a prepared food item?
Stay up with all the recent happenings in sales tax law and don’t let your business fail to employ the correct sales tax for each product.
Learn more about AvaTax for end-to-end sales tax management and compliance. www.avalara.com / 877.780.4848.