If the city’s Marijuana Committee has its way, there will be a pot-related proposition on Juneau’s municipal election ballots in October.
At their meeting Thursday, committee members decided to recommend the Assembly seek an additional 3 percent tax on marijuana sales on top of Juneau’s regular 5 percent sales tax. Any additional sales tax requires public approval, so this matter will appear on the ballots next fall if the Assembly heeds the Marijuana Committee’s recommendation.
If the Assembly supports the recommendation — and if voters do, too — marijuana sales would carry an 8 percent sales tax, which is exactly the way the city taxes alcohol sales. And this is exactly what committee member Debbie White was going for when she moved to recommend that the Assembly place the matter on the next regular election ballot.
“I know we can’t go to an 8 percent tax, like we do with alcohol, without putting it to a vote,” White said while explaining her motion. “So why not set it at 5 percent, and put it to a vote later?”
Late last month, when the committee began discussing how it would handle marijuana taxation, White and several other committee members argued that supporters of Ballot Measure 2, which legalized marijuana last year, wanted marijuana to be regulated like alcohol.
“The people who voted for this said treat marijuana like alcohol,” White said at the Oct. 22 Marijuana Committee meeting. “We have an 8 percent tax on alcohol, and I’m comfortable with that.”
Though the committee tabled the tax discussion before any motions were made, it moved relatively quickly through the discussion Thursday, and White’s motion was supported by a 5–2 vote.
Committee member Mike Satre was one of two to vote against the motion. The other was committee and Assembly member Maria Gladziszewski. Satre argued that the city should keep the tax as simple as possible since the Alaska Marijuana Control Board has not released its final regulations for the marijuana industry.
“Simplicity breeds compliance,” he said.
City Attorney Amy Mead said that putting the additional 3 percent sales tax to a vote is doable, but she cautioned the committee that basing the marijuana sales tax off of the city’s alcohol sales tax could be problematic. Juneau, she said, is one of only three municipalities in the state that imposes an additional sales tax on alcohol. This is because a state statute prohibits doing so.
Juneau was already imposing the additional sales tax when the statute was passed, so it was grandfathered in.
“We could not, for example, increase our sales tax rate on alcohol because we would lose our grandfather status,” Mead said.
This statute will not impact the Marijuana Committee’s recommendation because it is specific to alcohol. No state statute currently dictates how cities can tax marijuana sales, but the Legislature could enact such a statue, Mead said.
The ballot initiative that legalized marijuana in Alaska imposed a $50 per ounce excise tax on the “sale or transfer of marijuana from a cultivation facility to a retail store or marijuana product manufacturing facility.”
