Jason Klimek, Cannabis Team co-leader, had his “New York’s THC-Potency Excise Tax Analysis and Recommendations” white paper, which he co-authored with tax lawyer James Mann, quoted in the Times Union article “Hochul Proposes Repeal of Marijuana ‘Potency Tax.’”
The article notes that the potency tax, which New York State Governor Kathy Hochul proposed to repeal, has “deterred legal retail sales and driven more consumers to buy cannabis from unlicensed vendors.” A number of options have been proposed, including a wholesale excise tax of nine percent and a flat-rate excise tax of seven percent.
Jason and James’s white paper stated that “lower overall rates and simpler tax structures facilitate higher tax revenues and create an environment in which smaller businesses can thrive. . . . We advocate a single tax at the final point of cannabis sale as it is easier to administer and less burdensome for cannabis operators.”
The potency tax’s structure is complicated, which has made it very difficult to administer and audit. A flat-rate tax is much easier to administer and is more appealing to consumers, who often seek to purchase unregulated higher-potency marijuana products due to their lower prices. The article also noted that mitigating the sale of unregulated marijuana products is also a matter of public health and safety.
Times Union subscribers can read the full article here.