Avalara Taxrates > Blog > Sales Tax News > Anti-Sales Tax Oregon Embraces Marijuana Tax - Avalara

Anti-Sales Tax Oregon Embraces Marijuana Tax

  • Jul 2, 2015 | Gail Cole


Update, 7.23.2015: Oregon Governor Kate Brown signed House Bill 2041 on July 22. The taxes outlined below will take effect as described.

On the eve of July 1, 2015, as people were heading to Portland’s Burnside Bridge to celebrate the legalization of pot with a collective toke at midnight, lawmakers in Oregon were approving legislation that would impose a sales tax on recreational marijuana. In a state that has long opposed a general sales tax, this is big news.

Under House Bill 2041, a 17% tax is imposed on retail sales of the following:

  • Marijuana leaves
  • Marijuana flowers
  • Immature marijuana plants
  • A cannabinoid edible
  • A cannabinoid concentrate
  • A cannabinoid extract
  • A cannabinoid product that is intended to be used by applying the cannabinoid to the skin or hair
  • Cannabinoid products other than those described above

The tax would take effect January 1, 2016, so as to be in place when pot shops finally open for business some time in the fall of 2016.

In addition to the retail sales tax on recreational pot, HB 2041 would require medical marijuana dispensaries selling to nonmedical marijuana cardholders to “collect 25 percent tax on all sales made on or after January 4, 2016.” That tax would then be repealed effective December 31, 2016, just to keep sellers on their toes. The measure would also repeal the existing privilege tax imposed on marijuana producers.

Revenue generated by the tax would fund the Common School Fund, the Mental Health Alcoholism and Drug Services Account, and the State Police Account.

The Oregon Liquor Control Commission will begin accepting applications for retail outlets, growers, wholesalers and processors on January 4, 2016. Until shops open, Oregon residents (21 and older) may privately use marijuana and are permitted to possess up to eight ounces and grow up to four plants. Additional information.

photo credit: mind if i do a j? via photopin (license)

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.