AG: Medical Pot To Be Taxed 
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AG: Medical Pot To Be Taxed 
Posted by CN Staff on January 27, 2011 at 06:17:16 PT
By Howard Fischer, Capitol Media Services
Source: Arizona Daily Sun
Phoenix -- Arizonans who get a doctor's recommendation to buy medical marijuana are going to have to shell out at least a little extra money for the state -- if not a whole lot. Attorney General Tom Horne said Wednesday that the marijuana sold at state-regulated dispensaries being set up under Proposition 203 is subject to the 6.6 percent sales tax.Horne acknowledged that the law, approved by voters, spells out only those who have a specific recommendation from a doctor are entitled to purchase the drug. And he said that prescription sales are exempt from the levy.
"But that statute didn't use the word 'prescriptions,'" Horne said. "It used the word 'written certification.'"That was deliberate.A 1996 voter-approved law allowing doctors to prescribe marijuana was never implemented because the U.S. Drug Enforcement Agency threatened to revoke all prescription-writing privileges of any physician who wrote such an order for a substance that remains illegal under federal law. This new law, mirroring the successful practice in other states, avoids that term.Horne said that, as far as he's concerned, that ends the discussion."Since they're not prescriptions, then, in my view, it's taxable like anything else is taxable," he said. 300 Percent Tax Proposed  With that in mind, Rep. Steve Farley, D-Tucson, wants to go further -- much further. With some Republican support, he is proposing a 300 percent tax on marijuana sold at dispensaries.Farley agreed that voters decided in November that marijuana is a legitimate drug for the treatment of certain ailments. The measure contains various restrictions, notably a requirement for a doctor's recommendation."I just want to charge a co-pay," he said.The amount of money at issue is nothing to sneeze at. Horne figures the 6.6 percent levy could generate $40 million for the state, an estimate he said is based on a Denver Post story based on how much marijuana is sold through dispensaries in that community "and applying that pro-rata to the Arizona population."Farley had no estimate. But using Horne's $40 million as a starting point, a 300 percent levy could produce $1.8 billion a year, far more than needed to fix the state's anticipated $1.1 billion deficit for the coming fiscal year without scaling back the state's health care program for the poor.Andrew Myers, who managed the pro-203 campaign, expressed some concern with Horne's conclusion."We're not wild about the idea of increasing the cost of what essentially is medication for seriously ill people," he said.But Myers said what Farley wants would be challenged as illegal.He said it's one thing to tax marijuana like other products. A special tax, Myers said, runs afoul of constitutional provision barring lawmakers from altering voter-approved measures.Farley, however, said the tax is justified, saying the 300 percent level puts the tax on marijuana at the same general level as cigarettes, which are subject to a $2-a-pack levy."People use cigarettes as an over-the-counter medication for various types of things," he said.Nor was he convinced that the voter-approved status of marijuana as a legitimate drug to treat certain ailments makes it different.Anyway, Farley said those who really need the marijuana won't mind paying the extra fee. He figures marijuana sells for $40 an ounce, meaning the sales price, tax and all, would be $160.Myers reacted with incredulity."Forty-dollar-an-ounce marijuana is a myth," he said, saying the price from dispensaries elsewhere is more like 10 times that -- and putting the cost out of reach of many in need, particularly since the drug is not covered by health insurance.Farley said he does believe that some people probably could benefit from marijuana. But he argued the real impetus comes from those who eventually hope to legalize the drug entirely for recreational use."And if that's the direction they want to go in, then we might as well tax the heck out of it and benefit from it," he said.Source: Arizona Daily Sun (AZ)Author: Howard Fischer, Capitol Media ServicesPublished: Thursday, January 27, 2011Copyright: 2011 Arizona Daily SunWebsite: Medical Marijuana Archives 
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