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For pot stores evading taxes, any rationale will do

Post by TNT Editorial Board / The News Tribune on Aug. 22, 2012 at 5:45 pm with 4 Comments »
August 22, 2012 5:09 pm

Marijuana plant

This editorial will appear in Thursday’s print edition.

As if the world of medical marijuana weren’t confusing enough, now comes news that some dispensaries are faithfully paying sales taxes while others consider it strictly optional.

The ones that don’t pay offer a variety of reasons – none convincing and all self-serving.

They portray themselves as legitimate businesses yet argue that their product shouldn’t be taxed – because it’s illegal. Try to parse that logic.

One pretext is that marijuana is exempted from taxation because it’s a prescription drug. But under state law, marijuana is explicitly not a prescription drug. As medical marijuana people usually take pains to point out, the “green card” authorizations that some naturopaths, nurse-practitioners and doctors hand out like confetti are not prescriptions.

Yet another pretext is that customers aren’t really paying for marijuana; they’re merely making a “donation” to the provider to offset costs. This reflects the blend of magical thinking and greed unique to this illicit industry.

In the nonstoned world, when someone walks into a store with money, leaves some of the money there, then walks out with the store’s goods, it’s called a “sale.” Of course the money offsets costs; that’s how the business stays in business. It’s still a sale.

Donations are voluntary – the word means “gift.” You don’t have to give one to get the goods. Ask a medical marijuana user if he’ll keep getting the pot if he stops making “donations.”

We’re not necessarily endorsing Initiative 502, but the ballot measure would at least be up front about the selling, taxing and using. It would authorize marijuana sales at state-licensed stores without the humanitarian pretensions – and the taxes would be built into the price.

Proponents say those taxes would raise nearly $2 billion in revenue for the state over five years. But there’s a big “if”: That will only happen if the federal government agrees to look the other way.

Dispensary owners who aren’t paying state sales tax may be playing fast and loose with their federal income taxes, too. Under federal law, their business expenses aren’t deductible because their businesses are illegal. However, in one of those charming quirks of the law, they are still required to declare income even if it is obtained illegally.

Anyone who doubts that should look up the history of America’s Prohibition era. The federal government jailed mob leader Al Capone for tax evasion because he didn’t declare the profits he’d made on the illegal sale of bootleg booze. Purveyors of medical marijuana should take Big Al’s fate to heart.

Leave a comment Comments → 4
  1. ivedunnit says:

    “Anyone who doubts that should look up the history of America’s Prohibition era. The federal government jailed mob leader Al Capone for tax evasion because he didn’t declare the profits he’d made on the illegal sale of bootleg booze. Purveyors of medical marijuana should take Big Al’s fate to heart.”

    I find it pretty disgusting that the TNT would equate a multiple murderer (Capone) to anyone currently operating a marijuana collective. The federal government did not put away ‘ma & pa’ speak easy operators. That did put away the ones that were murdering multiple victims. Good lord TNT Editorial Board. Where’s the shame?

    Who wrote this? I think the writer should should stop being anonymous. Seriously. If you don’t like marijuana, don’t have any. The only ills that come from marijuana, come from it’s prohibition.

  2. lovethemountains says:

    The whole point of the last paragraph was the crime of failure to pay income taxes and is within the context of the story. Marijuana purveyors were not being compared to violent crimes committed by Capone. Don’t read something into the opinion piece that is not there.

  3. Dave98373 says:

    “Who wrote this?” The TNT editorial board.

    The problems of marijuana will always remain so long as the federal law exists. Trying to change a local or state law that conflicts with federal law is a waste of time and money.

  4. hannibal says:

    The tribune is right on script for I-502’s corporate smear campaign,
    attempting to tar anyone who opposes the falsely described
    “legalization” of I-502 as mobsters ;like Al Capone.

    It does not take a genius to recognize what the 3.5 million that
    I-502 has collected from insurance company execs, lawyers,
    out of state corporations seeking to establish a state run
    monopoly, and (sadly) some misinformed “activists” like Rick
    Steves has bought– total control of the media.

    Thus, the fact that f I-502 is not actually in the best interest of
    anyone other than Progressive Insurance, (which provides high
    risk car insurance in Washington) and some savvy out of State
    corporations seeking to cartelize the pot market is simply
    repressed and not printed in the well bought media.

    What the Tribune’s shills do not understand is that Al Capone was
    protected by law enforcement in Chicago that helped him maintain
    a monopoly, much like what will happen if I-502 passes.

    The State run monopoly envisioned by I-502 will allow a few large
    corporations and the State to cut up the profits, and the money will
    go into the pocks of out of state financiers and big government,
    and the economic effects will be negative, even if the three
    successive 25% taxes (+ 10% sales tax) are accepted and paid.

    The Trib needs to do an expose on how big Pharma doesn’t pay
    taxes on the billions of dollars of prescription medications they
    sell every year in Washington, many of which would be unnecessary
    if people could safely use pot instead.

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