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The Alaska House of Representatives passed legislation Friday that would revise the state’s tax structure on cannabis. If passed by the Senate, House Bill 119 will change the tax from $50 per ounce ($800 per pound) of product to a 7% sales tax. 

HB 119 passed the House 36-3; voting against the measure were Reps. Ben Carpenter, David Eastman, and CJ McCormick.

In 2014, voters in Alaska approved a ballot measure legalizing commercial growing and sales of cannabis, and accompanying tax structure.

Alaska is one of five states, including Colorado, Maine, Nevada, and New Jersey, that use use a weight-based cannabis tax, where growers have the responsibility for remitting taxes based on the weight of various parts of the plants. 

With the proposed sales tax, Alaska’s tax occurs at the point of sale, rather than on the growers, who now represent the largest agricultural sector in Alaska in the less than a decade that growing and selling marijuana has been legal. 

The top taxes for marijuana in the nation remain:

Washington: 37%
Virginia: 21%
Montana: 20%
Arizona: 16%
California and Colorado: 15%

The only other true statewide sales tax in Alaska is the 8 cents per gallon for highway fuel and 5 cents per gallon on marine fuel collected by the state.

HB 119, sponsored by the House Rules Committee, comes after a task force was convened by Gov. Mike Dunleavy to study and recommend a different tax structure, at the request of growers. The Alaska Marijuana Control Board also was in favor, by a vote of 4-to-1, of creating a different tax structure. The original version of the bill proposed a 3% tax, but that was worked up to 7% throughout the legislative journey.

“While a reduced tax structure will, in the short term, lower the state’s revenue stream, it will also help prevent the decline of the industry which would ultimately drive tax revenue downward. This change in tax structure will not only stabilize the industry while providing areas for Alaskan businesses to grow, but it will also allow the state to capture revenue from value-ad products which will increase the tax base,” the Rules Committee said in a statement at the time of introduction.

HB 119 has been sent to the Senate, where it has been referred to Senate Finance Committee only, but has not been scheduled for a hearing. The last day of session is May 15 and if the bill does not pass, it will die and sponsors will need to reintroduce it next year.

“}]] The Alaska House of Representatives passed legislation Friday that would revise the state’s tax structure on cannabis. If passed by the Senate, House Bill 119 will change the tax from $50 per ounce ($800 per pound) of product to a 7% sales tax.  HB 119 passed the House 36-3; voting against the measure were Reps.  Read More  

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