Tax & Accounting Blog

Oregon Pot Shops Lax on Grass Tax

Indirect Tax, ONESOURCE February 24, 2016

The state of Oregon has nearly 402 medical marijuana dispensaries, and as of January 1, 2016, those dispensaries that also sell recreational marijuana have been required to collect a 25% excise tax on the retail sale of that non-medical marijuana. In a temporary Administrative Rule adopted January 4, 2016, the Oregon Department of Revenue described the registration requirements. see OAR 150-475B.710-(A).  Delayed reactions abound as the Eugene Register Guard reports that as of February 22, nearly 25% of dispensaries that sell recreational marijuana had apparently spaced out on the registration requirement.

Federal money laundering law imposes potential prosecution threats for conducting business with Marijuana Dispensaries. 18 U.S.C. §§ 1956 and 1957. Despite a memorandum from the Justice Department laying out when banks will be prosecuted, many banks have shied away from doing business with dispensaries. Because of this lack of financing, many marijuana dispensaries have had to operate as cash only businesses. The Oregon Department of Revenue will be requiring those dispensaries who wish to pay their sales tax liabilities in cash to schedule an appointment 48 hours in advance, providing a very narrow window for dispensaries to get their remittances in. Forms for registering are available at the Oregon DOR website.