State tries to collect pot sales taxDecember 14, 2010 @ 2:42 pm (Updated: 1:37 pm - 3/28/11 )
By TIM HAECK
The Washington Department of Revenue has launched a statewide effort to collect sales tax from medical marijuana dispensaries.
Spokesman Mike Gowrylow says the department mailed letters to 90 dispensaries and related organizations on Friday, insisting that medical marijuana is not exempt from state sales tax and dispensaries must collect that money and turn it over to the state.
"The providers are selling marijuana and they need to be charging sales tax on those sales. It's not a prescription drug that's exempt from the sales tax," Gowrylow told KIRO Radio.
The letter also warned them that dispensaries must also pay the state business and occupation tax.
It's not known how many people are selling medical marijuana and how much tax money those businesses might generate.
Voters approved medical marijuana in Washington in 1998, but the law does not allow for marijuana sales. Instead, patients must grow marijuana themselves or designate a caregiver to grow it for them.
Because growing marijuana can be expensive and difficult, some patients have formed collectives to grow pot together, contributing dues to help pay for costs. In the Seattle area, some of the collectives have dispensaries that serve thousands of members.
The law is silent on such collectives, and prosecutors around the state have taken differing views on whether they're permissible. The state Health Department maintains they're not.
The Revenue Department's letter said medical marijuana isn't exempt from the sales tax _ as prescription medications are _ because it can't be prescribed under state and federal law. Washington's law instead requires an "authorization" from a medical professional.
Chris, one of the co-owners of C & J's Helpful Meds in Leavenworth, says all transactions are done as donations and they operate as a non-profit organization.
"We don't make any money really, doing this," Chris told CBS Radio.
"We're not involved in determining whether selling medical marijuana is illegal or not," Gowrylow said. "Our job is to administer state tax codes. If you're selling medical marijuana, it's a retail sale."
The Associated Press contributed to this report.
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