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Can the state tax medical marijuana?

The state Treasury Department says medical marijuana cannot be taxed in Michigan without a change in the law. The medical marijuana law was enacted by voters in 2008. But the law is silent on the question of taxing medical marijuana dispensed by licensed clinics and caregivers.  

James Campbell is an accountant who asked for the opinion. He says the state has not been taxing dispensaries and caregivers. But Campbell says he could not be sure that wouldn’t change.

“According to the Department of Treasury, it’s pretty clear cut that they are not authorized to tax medical marijuana, but the simple fact is that the state’s broke, it’s looking for revenue, and we’ve got a brand-new economy that’s really starting to thrive and would be a good source of revenue for the state.”

Republican Representative Ken Horn sits on the House Judiciary Committee and the House Tax Policy Committee. He says both committees may need to examine additional rules to further define what’s allowed under the medical marijuana law. 

“We need to look at the policy that revolves around this law so it’s clear to police, to prosecutors, to judges. What our Department of Treasury is interested in finding out, is there something that can be taxed here? The big question I’m asking, is this a medical prescription? Is that prohibited by the constitution to tax?”

The state constitution exempts prescriptions from the sales tax. A Treasury Department letter says there is nothing in the law that outlines whether medical marijuana is taxable. Other states, including Colorado, tax medical marijuana. 

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
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