Answer
State marijuana taxes stack. Most legal states charge an excise tax at retail, wholesale, or by weight. State and local sales taxes can add more. Retail excise rates run from 10% to 37% in several states. Washington has the highest retail excise rate at 37%. Colorado charges 15% at retail plus a 15% wholesale excise. California charges 15% excise plus sales tax. Illinois charges 10% to 25% at retail by product type plus sales tax.
How to Pay Cannabis Taxes: A Practical Guide
Tax types
Excise tax applies to cannabis. The base can be retail price, wholesale price, weight, or THC. Sales tax applies at the register. Local tax comes from city and county rates. Colorado has a 15% state retail marijuana sales tax and a 15% excise on wholesale. The state sales tax is 2.9%. Local sales taxes vary.
State examples
- Washington: 37% excise on retail sales. State sales tax is 6.5%. Local sales taxes add more.
- California: 15% excise on retail sales. State sales tax is 7.25%. Local taxes add more.
- Colorado: 15% excise on wholesale. 15% retail marijuana sales tax. 2.9% state sales tax. Local taxes add more.
- Illinois: 10% flower, 20% concentrates, 25% edibles at retail. 6.25% state sales tax. Local taxes add more.
- Massachusetts: 10.75% excise. 6.25% state sales tax. Local tax up to 3%.
- Oregon: 17% retail tax. No state sales tax.
- New York: 13% excise, split 9% state and 4% local. State and local sales taxes also apply.
Weight-based taxes
Alaska taxes cannabis by weight. The state rate is $50 per ounce on flower, $25 per ounce on trim, and $15 per ounce on other plant material. This differs from price-based taxes.
High Tax States vs Low Tax States for Cannabis: Oregon Wins
Why totals differ
A 30% tax on a $40 eighth adds $12 before sales tax. A 37% excise on a $40 eighth adds $14.80 before sales tax. Local rates push totals higher. Product type matters in Illinois. Weight taxes hit low-price flower harder. Check the state revenue department for current rates. Tax laws change.