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Washington State Changes Marijuana Taxes, July 2015

  • Jul 1, 2015 | Gail Cole

 Washington marijuana businesses will have to act fast to implement new tax structure.

Hold on to your pipes! On June 30, 2015, Washington Governor Jay Inslee signed legislation that reforms the regulation and taxation of the marijuana market. House Bill 2136 takes effect July 1, 2015.

According to the Washington Department of Revenue website, “Beginning July 1, 2015, the excise tax structure for recreational marijuana in is changing.”

Starting today, the marijuana excise tax is:

  • No longer levied on the producers, processors and retailers, Instead, the tax is imposed on retail customers.
  • Going from 25 percent (at each level) to 37 percent on the retail customer.
  • No longer part of the selling price subject to retail sales or B&O taxes.

It goes without saying that this sort of change generally requires a bit of time to digest and institute. Businesses will have to scramble to comply with the new law.

On the other hand, the new tax structure should make compliance easier for businesses. And they will no longer have to pay federal income tax on the tax, as previously required.

Both medical marijuana patients and recreational users have to pay the new tax. Patients in a registry taking effect July 2016, however, will be exempt from paying sales tax on their purchases (The News Tribune).

This kind of rapid-fire change is one good reason to implement an automated sales tax solution. Learn more.

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.