Cannabis advocates push senators to ease draft bill’s tax burden – Roll Call

The details of senators’ vision for a federal cannabis tax regime will be a key factor in the coming weeks as Majority Leader Charles E.

A letter he wrote to colleagues with Wyden and Booker argues to end the complications of a federal ban on a substance that’s already legal in many states.

The effort looks to the Prohibition era as the most comparable historical case, though the current moment poses unique challenges.

The senators’ draft would create a federal cannabis excise tax that aims to disincentivize use, particularly by minors, while ensuring small businesses can compete with larger operations.

It’s similar to the tax regime devised by House Democrats in a bill that passed last year mostly along party lines.

It’s unclear how much revenue the Senate proposal would bring in.

The Congressional Budget Office found that the House bill as passed in 2020 would generate almost $13.7 billion in additional revenue for the federal government over a decade.

Colorado Attorney General Phil Weiser, a Democrat, is among those asking senators to reconsider the tax rate.

Colorado wants to hold onto the revenue it’s generated from taxes and fees that include a 15 percent excise tax at the wholesale level and a 15 percent tax on marijuana sold in stores.

The Tax Foundation’s Boesen said compliance costs and widespread access are critical factors alongside tax rates.

Michael Bennet, D-Colo., a Finance panel member and fellow former presidential candidate, didn’t have any comment on the tax structure outlined in the Wyden draft.

Cannabis Council, said in an interview that the Senate draft proposed a tax too steep that climbs over too short a period and in bursts too large.

The National Cannabis Industry Association also backs a lower rate and wants to see edits to the small business incentive.

The group also wants a longer runway for getting to the permanent tax rate, arguing it could take several years to set up markets so businesses wouldn’t truly see a gradual rise.

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