 Minnesota is moving towards recreational legalization, with several key lawmakers and the governor agreeing that it should happen. And while they’re all in agreement over that, they are not in agreement about how it should be taxed.
One current bill that’s been moving through six House committees and four Senate panels has a proposed 8% excise tax, which has been so far uncontested. But now, Governor Tim Walz, is requesting a much higher rate of 15% excise tax, as part of his biennial budget. He claims the higher excise tax is needed for generating more tax revenue, which is necessary for the support substance abuse treatment programs that legalization opponents demand. Democratic Representative Zack Stephenson pointed out that the tax rate needs to be low enough to be able to allow the legal market to beat the illicit market prices. But Governor Walz said, “the evidence doesn’t show” that a higher excise tax would help the illicit market thrive. He seemed to want to appease legalization opponents by saying that higher tax revenue for substance abuse programs would be more “palatable” for opponents who fear that, otherwise, general tax fund money will end up going towards these types of programs. Walz has previously said he thinks the legislature could have the final measure completed and passed “by May.” But, there is still a significant amount of legislative work to be done, so lawmakers should have plenty of time to consider the tax rate issue. Comments are closed.
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