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Massachusetts Cannabis Tax Rate Compared to Other States

Massachusetts Cannabis Tax Rate Compared to Other States
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Massachusetts voters approved a recreational marijuana sales plan that positioned the state to have the second-lowest tax rate of all the states with a legalized industry, but a deal struck Monday is going to increase that tax rate.

The compromise language mostly splits the difference between a House proposal to raise the total tax on marijuana to a mandatory 28 percent and the Senate version of the bill, which called for keeping the tax at a maximum of 12 percent.

Under the agreement, consumers would pay a 10.75 percent excise tax in addition to the state’s regular 6.25 percent sales tax. Cities and towns would also have the option of adding a 3 percent local tax.

This three-part taxation plan is simpler than some of the other states with recreational pot, and more complicated than others. For example:

The proposed marijuana tax rate in Massachusetts remains significantly lower than the state’s taxes on tobacco products, where cigarettes or cigars are taxed at a rate of 40 percent plus $3.51 per 20-count package. Smokeless tobacco is taxed at a rate of 210 percent.

Massachusetts’ taxes on alcoholic beverages ranges from a few cents to over $4, depending on the size, variety and proof of the product.

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