Sen. Migden Sponsors Bill to Relieve Dispensaries of Back Sales Taxes (SB 529)

Status Update July 10, 2007

Sen. Migden's tax amnesty bill for medical cannabis dispensaries is presently on hold. New language is being considered to clarify the legality of dispensaries. Debate is expected to be held over until next year.

SACRAMENTO, Jun 15 - State Sen. Carole Migden (D-SF) has introduced a bill, SB 529, that would relieve medical cannabis dispensaries from obligations for back sales taxes provided they promptly comply and register with the Board of Equalization.

California NORML supports SB 529 on the grounds that it would encourage marijuana to be treated like other legal products. Under Cal law, all herbal medicines not sold in pharmacies by prescription are subject to sales tax. Last February, the Board of Equalization sent a special notice to California medical cannabis dispensaries advising them that they were liable for sales taxes. Many dispensaries have complied, in some cases paying $100,000s in taxes per year. Many others have yet to do so, some out of fear of exposing themselves to obligations for back taxes. Sen. Migden's bill would eliminate this threat for those dispensaries that promptly comply with the law.

California NORML estimates the total potential sales tax revenues from medical cannabis at $70 - $120 million per year, with a total statewide customer base of some 150,000 - 350,000 patients and a gross retail market of $800 million to $2 billion per year.

SB 529 is in the Assembly, which adopted it as a gut-and-amend replacement for a recycling measure already passed by the Senate. The bill is expected to be sent to the Assembly Committe on Revenue and Taxation for hearings in early July.

Text of SB 529

Legislative Status

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