tax

SACRAMENTO — After a Rancho Cordova woman complained last year about the skunky smell of pot being grown by a medical marijuana-using neighbor, one City Council member suggested a ban on residential pot cultivation.

That proposal went nowhere. But now Rancho Cordova is asking voters to make the city the first in California to approve a tax on home-grown pot for personal use.

It may be legal to purchase medical marijuana with a prescription in 14 states, but is that pot tax-deductible as a medical expense?

Generally, it has not been considered tax-deductible due to its illegality under federal law, which guides the Internal Revenue Service's policies.

But a recent letter from an IRS agent to one of Senator Chuck Schumer's constituents raised questions and sparked hope among medical marijuana advocates that the federal policy had changed.

Province metro affairs columnist Jon Ferry

Province metro affairs columnist Jon Ferry
Photograph by: File photo, The Province

If you're at all interested in the ongoing debate over pot legalization, look south right now to cash-starved California.

It's smoking hot there, with arguments being marshalled for and against Proposition 19, which would allow people 21 and over to possess and cultivate marijuana for personal use -- and let local governments regulate and tax commercial production of it.

Denver City Councilman Doug Linkhart has proposed a ballot measure that would place an additional 6 percent sales tax on medical marijuana sold in the city to pay for youth programming.

He wants his colleagues on the council to refer the issue to the voters on the November ballot and will bring the matter before the council's safety committee, which he chairs, on July 21.

(July 7) -- Following an example set by the city of Oakland, several California municipalities are looking at taxing local marijuana sales to help bridge devastating budget deficits. And with voters set to decide on a statewide ballot initiative in November to legalize the recreational use of the drug, there could be significant money at stake, officials say.

Oakland began taxing medical marijuana in January, though the amount collected so far was not immediately available for release. On Tuesday, the city of Long Beach, near Los Angeles, took steps to adopt its own tax on local dispensaries. Sacramento, the state capital, as well as San Jose and Berkeley also are considering adding a pot tax.

Medical marijuana, and its attendant policy cluster of drug legalization, has historically faced a thorny road, even in sympathetic States. The various financial interests, colorful bipartisan coalitions on both sides of the issue, and varying media portrayals of drug use as either horrifically destructive or fantastically liberating/hip make drug politics a thorny path for political figures to navigate, to the point that even President Obama felt the need to hastily denounce the idea of drug legalization

WASHINGTON: American states are scrambling to mend their battered budgets, with many resorting to so-called ''sin'' taxes and other imposts, while slashing spending, in an attempt to bridge gaping holes inflicted by the recession.

California was set to unveil drastic new measures yesterday, with a spokesman for its Governor, Arnold Schwarzenegger, warning of ''terrible cuts'', as the state seeks to wipe out a $US20 billion ($22 billion) deficit.

But California is not alone. Nearly every one of the 50 US states has been inflicting ''tough love'' on its people in moves that could yet undermine the nation's nascent economic recovery, shown this week by brighter job figures and the first year-on-year drop in monthly home repossessions in five years.

Voters in the western Colorado town of Fruita on Tuesday approved a 5 percent sales tax on medical marijuana and related paraphernalia, making it the first city in Colorado to tax pot.

Fruita ― an agricultural community located west of Grand Junction near the Utah border ― doesn't yet have any medical-marijuana dispensaries, which have proliferated in Denver over the past year.

The tax will go into effect on May 1. City officials expect it to raise about $100,000 in the first full fiscal year, despite the current lack of dispensaries, according to the ballot issue.

Proposed legislation that would tax medical marijuana - if voters legalize it this fall - narrowly passed the state Senate on Thursday thanks to a split among Republicans.

The bill passed with a vote of 17-12 after five Republicans, including Senate President Bob Burns, R-Peoria, supported it. It now goes to the House for consideration.

Senate Bill 1222 would make medical marijuana subject to the state sales tax, which right now is at 5.6 percent. Most drugs and medical supplies are exempt from this tax. It would also tack on a $20 per ounce luxury tax.