Question of sales tax on Marijuana discussed by Columbia City Council

Question of sales tax on marijuana discussed by Columbia City Council

The Columbia City Council on Tuesday discussed the addition of a 3% sales tax on adult-use marijuana for placement on the April ballot.

It is hard to gauge how much additional revenue such a tax would bring to the city since not all of the marijuana facilities in Columbia are paying the medical tax, said Matthew Lue, finance director.

When Amendment 3 passed in November for recreational marijuana, it allowed political subdivisions, like the city, to enact an up to 3% tax, said Nancy Thompson, Columbia's city attorney. Two items, which had their first reading Tuesday, related to business licensing and other regulations for a council vote in February.

"This (tax question) is required to go ahead due to timelines with certifying the elections to the county clerk," Thompson said.

Potential costs associated with the approval of recreational marijuana use include public education on rules as well as law enforcement training, she added, answering a question from Fifth Ward Council Member Matt Pitzer.

The 3% is in addition to city sales tax. The county also has introduced its own 3% tax on medical marijuana and the state has a 6% tax on recreational marijuana sales. Columbia mayor Barbara Buffaloe is awaiting clarification on whether the various sales taxes can be stacked because she has heard it both ways, she said.

"They are on top of current taxes," Lue said. "So, you'd have to pay the 3% city, 3%, county and 6% state."

The question Buffaloe has is if the city and county tax would both apply in city limits. That answer is less clear, Thompson said.

Proceeds from the tax are expected to go toward mental health and addiction services. If approved, any taxes go into general revenue, so the revenue usage could change during the city budget process depending on council discussion, Thompson said, answering a question from First Ward Council Member Pat Fowler.

Accountability on how money is spent is at the council's discretion. Statements in the ordinance are nonbinding, in other words. Collection of the tax likely would start Oct. 1 if approved, which also is the start of the city's fiscal year.

Comments from the public included the suggestion of using the revenue on affordable housing and a need for more certainty on how the revenue will be spent before being put to the public vote.

When comparing the marijuana tax to other taxes, such as on cigarettes or wine and beer, it is proportional with what already is in place in the state, said Andrea Waner, Ward 2 council member.

Placing the tax question on the ballot was approved. Voters in Wards 1 and 5 also will select their council members in April.

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Region: Missouri

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