Introduction: In a significant legal development, a second judge in Missouri has ruled in favor of “tax stacking” for adult-use cannabis sales. Buchanan County, known for its progressive stance on cannabis, now allows an additional tax collection on top of municipal taxes. This decision has implications for both local governments and consumers.
The Ruling and Implications:
Circuit Judge Daniel Kellogg, presiding in Buchanan County, upheld the county’s authority to impose an extra tax on adult-use cannabis sales within the Saint Joseph City limits. The ruling dismisses the petitioner’s argument that “Local Government” should prohibit such taxation. According to Judge Kellogg, both the city and the county fall under the definition of “Local Government,” granting them the power to collect this tax.
Background:
- Buchanan County: Located in northwestern Missouri, Buchanan County has become a focal point for cannabis-related legal battles. The county’s willingness to explore innovative tax policies has drawn attention from both cannabis companies and legal experts.
- Vertically Integrated Cannabis Company: Vertical Enterprise, based in St. Joseph, Missouri, initiated the lawsuit against the Buchanan County Collector’s office, the Missouri Department of Revenue, and the Buchanan County Clerk’s office. The company contested the additional 3% tax imposed by the county.
- Existing Tax Structure: Prior to this ruling, sales taxes in Missouri could already reach up to 12%. The state imposes a 6% tax, and local governments can add an extra 3% tax on top of that.
Consumer Impact:
- Outrage and Concern: Vertical CEO Chris McHugh expressed frustration, stating, “Consumers should be outraged. They’re paying this.” With the cumulative tax burden, cannabis consumers in Buchanan County face higher costs than ever before.
- Broader Implications: Judge Kellogg’s ruling sets a precedent for other counties and cities in Missouri. It aligns with a similar decision by St. Louis County Circuit Judge Brian May, who also affirmed the authority of both counties and cities to levy taxes on cannabis sales.
The Buchanan County ruling underscores the evolving landscape of cannabis taxation. As more states legalize cannabis, local governments grapple with balancing revenue needs and consumer affordability. For now, Buchanan County stands as a trailblazer in this ongoing debate.
