Avalara Taxrates > Blog > Legislation > Will New York Be Next to Legalize Recreational Marijuana? - Avalara

Will New York Be Next to Legalize Recreational Marijuana?

  • Dec 16, 2013 | Gail Cole

 New York may be next state to try to legalize pot. It won't be easy.

Senator Liz Krueger (D- Manhattan) believes it is time to “legalize, regulate and tax marijuana under state law….” To that end, she is introducing the Marijuana Regulation and Taxation Act (MRTA).

According to Sen. Krueger, “Prohibition of marijuana is a policy that just hasn’t worked… The illegal marijuana economy is alive and well, and our unjust laws are … creating a vicious cycle that ruins lives and needlessly wastes taxpayer dollars. Worst of all, this system has resulted in a civil rights disaster: African Americans are dramatically more likely to be arrested for pot possession than whites, despite similar rates of marijuana use among both groups.”

According to Krueger’s press release, more than 97% of marijuana-related arrests in New York are for possession. And while government health surveys indicate that “young whites use marijuana at higher rates than young blacks and Latinos,… the NYPD has arrested blacks for marijuana possession at seven times the rate of whites and Latinos at nearly four times the rate of whites.”

The senator spoke of racial injustice and ruined lives. She pointed out that the modus operandi is not working—U.S. sales of marijuana are not significantly shrinking--and therefore the legalization and regulation of pot is “a practical alternative whose time has come.”

The Marijuana Regulation and Taxation Act

The legislation enrolled on December 11 seeks to regulate marijuana much like alcohol. In brief, it would:

  • Remove penalties for possession of 2 ounces of marijuana or less;
  • Make 18 the minimum legal age for marijuana possession and consumption;
  • Establish that possession or use of marijuana by persons under the age of 18 are violations;
  • Allow for home cultivation of up to six marijuana plants;
  • Empower the State Liquor Authority to grant licenses for marijuana production, transport and retail sale;
  • Prohibit sale of marijuana to persons under 21;
  • Allow communities to opt out of retail sale for off-premises consumption through a referendum process similar to what is now in place for alcohol sales;
  • Allow communities to opt in to allow retail sales for on-premises consumption through a vote of the local legislature, in addition to the local community board in the case of New York City;
  • Establish an excise tax of $50.00 per ounce of marijuana, and authorize localities to charge a sales tax on retail sales; and
  • Direct a portion of the state tax revenue collected to be directed to re-entry programs, substance abuse programs, and job training programs in low-income, high-unemployment communities.

If adopted, “the New York State marijuana market could represent as much as a $3 billion industry.”

The Marijuana Regulation and Taxation Act has been praised by a number of elected officials and legalization advocates. They called New York’s marijuana policies “behind the times” and spoke of the “need to move from a dysfunctional prohibition model to the tax and regulate approach.”

Another perspective

Yet legalization will be a tough sell, as New York State has not even legalized medical marijuana. Although the New York Assembly approved legislation that would allow residents with “serious medical conditions” to access medical marijuana, the State Senate failed to act on the legislation. According to the Huffington Post, “Advocates vow to try again in 2014.” 20 other states and the District of Columbia have legalized the use of marijuana for medical purposes.

As elsewhere, there are strong opponents to legalization in the Empire State. Senator Andrew Lanza (R-Staten Island) said, “I very strongly oppose this measure…. We could probably make money selling heroine, too. Everything ought not be for sale, particularly the well-being of our children.” He worries that legalization of marijuana would “’open the door’ to harder drugs like cocaine.”

In his 2013 State of the State Address, Governor Andrew Cuomo (D) spoke of the fact that 82% of the people arrested in NYC for marijuana possession are black and Hispanic. While he said that “we will not tolerate discrimination,” the governor does not believe the time is right for the legalization—not even for  medical marijuana.

Colorado and Washington State

Voters in Colorado and Washington State, on the other hand, approved the legalization and regulation of recreational marijuana in the November 2012 election. Retail stores in both states are on track to open on schedule: in January 2014 in Colorado and later in the spring in Washington.

Once the shops are in business, both states must “show skeptical federal authorities that they can control this new world of regulated marijuana, and keep it from flowing to underage consumers, into other states or into the grip of drug traffickers and violent cartels” (CNBC).

Get Free Tax Rate Tables

New York State Rates

photo credit: smokershighlife via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.