AP exclusive

[WashougalWonder]

SEATTLE (AP) -- The Washington Department of Revenue has launched a statewide effort to collect sales tax from medical marijuana dispensaries.

Spokesman Mike Gowrylow says the department mailed letters to 90 dispensaries and related organizations on Friday, insisting that medical marijuana is not exempt from state sales tax and dispensaries must collect that money and turn it over to the state.

The letter also warned them that dispensaries must also pay the state business and occupation tax.

Now this is a good one. Far out...but wait, doesn't the State also state that dispensaries are illegal? Now I do not know where the exact clause is, but on the DOH website in FAQ the following:

Are dispensaries legal?

No. The law does not allow dispensaries. The law only allows qualifying patients and designated providers to possess medical marijuana. From: Medical Marijuana Frequently Asked Questions - Washington State Dept of Health (http://www.doh.wa.gov/hsqa/medical-marijuana/FAQmore.htm#Dispensary)

fricking oxymoronic crap. Lawyer fuel.

[RAINHAZE]

Now this is a good one. Far out...but wait, doesn't the State also state that dispensaries are illegal? Now I do not know where the exact clause is, but on the DOH website in FAQ the following:
From: Medical Marijuana Frequently Asked Questions - Washington State Dept of Health (http://www.doh.wa.gov/hsqa/medical-marijuana/FAQmore.htm#Dispensary)

fricking oxymoronic crap. Lawyer fuel.

Sounds to me that "one hand doesn't know what the other hand is doing"!
(I got a good idea though) LMAO

[justpics]

The DoH would probably tell you that they don't believe that the voter's intent was to allow dispensaries, but when pressed if they could point out what section of the law a dispensary is in violation of, they will become silent or shift the topic.

[WashougalWonder]

but they want to tax it and register it.

[justpics]

harder and harder to distinguish reality from TheOnion articles.

[gypski]

Typical state action, putting the cart before the horse. No wonder they've created such a cluster fuck with everything they do!! :D

[hiamps]

Just saw it on the News so I emailed the DOH to ask what was up...Asked them if they changed the law and forgot to tell us.

[WashougalWonder]

great please advise on what you found out. That deserves an atta boy I think

[hiamps]

Copout, just like I figured...I told her the link didn't work and that I had read her site and it didn't answer my questions and could she please forward my email to someone that cares to answer me...Here was her responce...

"For information on medical marijuana, please visit the DOH web site, Medical Marijuana Frequently Asked Questions - Washington State Dept of Health (http://www.doh.wa.gov/hsqa/medical-marijuana/Default.htm) <http://www.doh.wa.gov/hsqa/medical-marijuana/Default.htm>

Julie Kitten
Program Manager
Medical Quality Assurance Commission
Phone: 360-236-2757
Fax: 360-236-2795

Mailing Address:
PO Box 47866
Olympia, Washington 98504-7866

Street Address:
243 Israel Road SE
Tumwater, Washington 98501

The Medical Quality Assurance Commission protects the public health by assuring the competency and quality of physicians and physician assistants by establishing and enforcing qualifications for licensure, standards of practice, and by disciplining and monitoring of practitioners.

Public Health - Always Working for a Safer and Healthier Washington"

Here was what I wrote...

"I am curious about the following comments I copied from a message board? Can the State tax something that is illegal or did the DOH change the law? How do I find out the latest information on Medical Marijuana? Can I open a Medical Marijuana Dispensary without worrying about my local Police Dept as long as I follow the same rules the others follow? Just seems everyone I talk to has different info. Thank you for your time and have a great day!



Pete *****
pete@**********.com





SEATTLE (AP) -- The Washington Department of Revenue has launched a statewide effort to collect sales tax from medical marijuana dispensaries.

Spokesman Mike Gowrylow says the department mailed letters to 90 dispensaries and related organizations on Friday, insisting that medical marijuana is not exempt from state sales tax and dispensaries must collect that money and turn it over to the state.

The letter also warned them that dispensaries must also pay the state business and occupation tax.


Now this is a good one. Far out...but wait, doesn't the State also state that dispensaries are illegal? Now I do not know where the exact clause is, but on the DOH website in FAQ the following:

Quote:

Are dispensaries legal?

No. The law does not allow dispensaries. The law only allows qualifying patients and designated providers to possess medical marijuana.


From: Medical Marijuana Frequently Asked Questions - Washington State Dept of Health"

[gypski]

Another Catch 22 created by the geniuses that work for the state. If you pay, you admit you have been breaking the law. Is amnesty being offered for paying the extortion fee? BTW, it doesn't effect me, but who knows down the road. :D


Copout, just like I figured...I told her the link didn't work and that I had read her site and it didn't answer my questions and could she please forward my email to someone that cares to answer me...Here was her responce...

"For information on medical marijuana, please visit the DOH web site, Medical Marijuana Frequently Asked Questions - Washington State Dept of Health (http://www.doh.wa.gov/hsqa/medical-marijuana/Default.htm) <http://www.doh.wa.gov/hsqa/medical-marijuana/Default.htm>

Julie Kitten
Program Manager
Medical Quality Assurance Commission
Phone: 360-236-2757
Fax: 360-236-2795

Mailing Address:
PO Box 47866
Olympia, Washington 98504-7866

Street Address:
243 Israel Road SE
Tumwater, Washington 98501

The Medical Quality Assurance Commission protects the public health by assuring the competency and quality of physicians and physician assistants by establishing and enforcing qualifications for licensure, standards of practice, and by disciplining and monitoring of practitioners.

Public Health - Always Working for a Safer and Healthier Washington"

Here was what I wrote...

"I am curious about the following comments I copied from a message board? Can the State tax something that is illegal or did the DOH change the law? How do I find out the latest information on Medical Marijuana? Can I open a Medical Marijuana Dispensary without worrying about my local Police Dept as long as I follow the same rules the others follow? Just seems everyone I talk to has different info. Thank you for your time and have a great day!



Pete *****
pete@**********.com





SEATTLE (AP) -- The Washington Department of Revenue has launched a statewide effort to collect sales tax from medical marijuana dispensaries.

Spokesman Mike Gowrylow says the department mailed letters to 90 dispensaries and related organizations on Friday, insisting that medical marijuana is not exempt from state sales tax and dispensaries must collect that money and turn it over to the state.

The letter also warned them that dispensaries must also pay the state business and occupation tax.


Now this is a good one. Far out...but wait, doesn't the State also state that dispensaries are illegal? Now I do not know where the exact clause is, but on the DOH website in FAQ the following:

Quote:

Are dispensaries legal?

No. The law does not allow dispensaries. The law only allows qualifying patients and designated providers to possess medical marijuana.


From: Medical Marijuana Frequently Asked Questions - Washington State Dept of Health"

[hiamps]

Got a new responce, maybe we will get some info....

"I'm sorry to hear that the link did not work for you.

I will try to find answers to your questions.
Julie"

[WashougalWonder]

Kind of what I figured....time to ask our elected officials.

[killerweed420]

If I had a dispensary I would agree to taxes if the state would agree to represent them if some government agency comes and tries to close them down. If you pay the taxes then the state must agree that you are operating legally inside the state. Otherwise the state is involved in racketeering which I believe is illegal every where.

[hiamps]

Well she sent me a link to the dept of revenue so now I wrote them a letter...

"I was under the impression that marijuana dispensories are not legal, did that change? On the DOH FAQ page it says...
Are dispensaries legal?
Medical Marijuana Frequently Asked Questions - Washington State Dept of Health (http://www.doh.wa.gov/hsqa/medical-marijuana/FAQmore.htm#Dispensary)
No. The law does not allow dispensaries. The law only allows qualifying patients and designated providers to possess medical marijuana.
I would like to open a dispensory and want to know if I get all the correct licenses and do everything on a donation basis but pay B&O and charge and pay the sales tax am I protected from local Law Enforement?"


See if I get a responce.

[hiamps]

Here is what they say on the Dept of Revenue site...

"Are sales of "Medical Marijuana" subject to sales tax?
In the state of Washington, sales of medical marijuana are retail sales. As such, the selling price is subject to retail sales tax. In addition, the seller is subject to the business and occupation (B&O) tax under the retailing classification. This is true even if it is sold by a medical marijuana dispensary.

Sales of medical marijuana are not eligible for the retail sales tax exemption provided for prescription drugs. RCW 82.08.0281 provides an exemption from retail sales tax for certain drugs, but only when prescribed as authorized by the laws of this state. However, marijuana is a Schedule I controlled substance and cannot be prescribed under either federal or state law in Washington.

Chapter 69.51A RCW addresses medical marijuana, but does not authorize the prescription of medical marijuana. This chapter specifically avoids authorization of a prescription by referring to â??valid documentationâ?�, which does not equate with a prescription as defined in RCW 82.08.0281(4)(a), or as provided in RCW 69.50.308 (Prescriptions). Chapter 69.51A provides that it is only intended to protect qualifying patients, designated providers, and physicians from liability, prosecution, or criminal guilt when marijuana is possessed, used, provided or authorized."

[hiamps]

I like the line "This is true even if it is sold by a medical marijuana dispensary." Does this mean street sellers are also supposed to pay B&O and charge tax? LOL

[gypski]

I like the line "This is true even if it is sold by a medical marijuana dispensary." Does this mean street sellers are also supposed to pay B&O and charge tax? LOL

Well, its extortion if it isn't legal to sell mmj, but its ok for the state to force you to pay a tax or LEO will make a call. That's how they got Al Capone. :wtf:

[WashougalWonder]

I would love to see this get fought out in court.

[killerweed420]

It just forces businesses to cook the books, which most small businesses do any way. You have to be creative in how things are charged against the business. Most small businesses use a backup sales receipt system to help cook the books. You can't file income taxes any way because its illegal and you certainly wouldn't be able to declare the cost of purchasing product.
Would be nice if the government just grew up and tried to operate like adults.

[hiamps]

So if you run a dispensary like a business and pay your state taxes, wouldn't you then HAVE to file a return? If you file a return then the Feds would step in...Seems the State is wanting to get the Feds involved. But how will that help the State make money?

[justpics]

You can't file income taxes any way because its illegal and you certainly wouldn't be able to declare the cost of purchasing product.

you don't have to label product purchased and sold on your taxes as "marijuana", and the even if you did, the IRS can only give that info to the DEA through specific federal subpoenas if my memory serves correct. Suffice to say, that even if your "retail sales" were cocaine, you'd have to declare (non specifically) those sales and pay taxes on it, legal or not. Just cause your business might be illegal doesn't mean you don't have to pay taxes on it. Fucked up? yes, but that is the law.

at least that's what ive been told when I ask real lawyers about this stuff.

AFAIK, the reason most dealers get away without paying taxes is because they don't bring in enough cash to raise suspicion, and since they deal with only cash sales, they'd have to bring in a lot for the government to take notice and or prove anything.

[hiamps]

Yep that seems to be the case, here is the responce from dept. of rev...

"Mr. ******,



The Department of Revenue has no jurisdiction over whether or not medical marijuana dispensaries are legal. Therefore, we cannot help you with this aspect.



However, whether or not such dispensaries are legal, their sales of marijuana are subject to sales tax and retailing
B&O tax. Dispensaries making such sales must be registered with the Department of Revenue and report/remit the taxes due on such sales.

[WashougalWonder]

*shaking head, half smile on face*

LOL, Danged if you do, Danged if you don't.

I guess I will contact my local state legislators. This is stupid. I don't mind paying taxes...well I wouldn't ..... but this cannot be....the State by taxing something they say is illegal, constitutes that the state itself is violating Federal Law. Hmmmmm.

Actually folks this could be a very important tool in the fight to legalize. A State taxing it? I think it is awesome idea, but lets be functional here.

I sent this

First let's get a couple items out of the way. I am medical Cannabis patient. Fortunately I don't have to use dispensaries....although there are none close to my area anyway.

Second. I think to tax cannabis is great, no problem. At least with the tax itself.

Big problem with the fact that the State says that dispensaries are illegal and now they want to tax them. This in itself (dispensaries) is a whole topic, which I will not digress to. What I perceive as a citizen, is that the government is calling the kettle black. How can something illegal be taxed? Is the State in itself now violating Federal laws by taxing. Additionally, the State, even though on their website stating dispensaries are illegal, seems to condone illegal activity by taxing it, sort of like profiteering off of an illegal activity. Many of the lay public view this as oxymoronic and quite possibly illegal in itself.

Another issue pointed out in the mess is that by State law, medicine is not taxable....yet medical cannabis is now considered taxable. Totally against what I understood the State laws to state.

Do you see the complicated mess this creates?

As a legal cannabis patient, I live in a gray area, fearing constantly that the Feds might show at my door for a couple of plants that allow me to carry on a half-way normal life, even though I am unable to work. I realize I have to allow the police into my home any time they want to inspect, I have lost a bunch of my civil rights with that one.

Also one last item, if the State licenses all the dispensaries and the taxation stuff, it essentially puts a huge target on the back of the dispensary such that the Feds can track each and every one and dissipate the law on what seems like any given whim on who gets legal action taken against them.

If dispensaries were legal, I could become a functional member of society again (medically disabled, almost 60, and white male) contributing taxes, social security, and providing for the needs of the community at the same time. It also puts the individual in a position of 1. not filing federal tax and breaking the law; 2. filing federal tax and getting arrested; 3. sorta lying trying to fulfill this oxymoronic approach and getting caught anyway

In Summary, as I do get off the path now and then. How can the State tax something that is Federally illegal and State illegal without becoming criminal themselves. The State is coming across to the general public as a bureaucratic mumbo-jumbo.

Do any of you think this could be discussed at the legislative level such that us poor little guy that just wants to live with a very debilitating condition have some solid guidelines how to go about all this? The way things stand currently is nonsense.


Will let you know of responses.
EDIT: That went to my 3 legislators.

[gypski]

Well put. We all know who screwed up the situation, and it ain't us! :thumbsup:


*shaking head, half smile on face*

LOL, Danged if you do, Danged if you don't.

I guess I will contact my local state legislators. This is stupid. I don't mind paying taxes...well I wouldn't ..... but this cannot be....the State by taxing something they say is illegal, constitutes that the state itself is violating Federal Law. Hmmmmm.

Actually folks this could be a very important tool in the fight to legalize. A State taxing it? I think it is awesome idea, but lets be functional here.

I sent this


Will let you know of responses.
EDIT: That went to my 3 legislators.

[hiamps]

Anyone good at writing? If someone could write a professional letter I would copy it and send it to my legislators and anyone else I can think of. Everyone should flood every email box they can....

[emilya]

Just my 2c on this, but operating a dispensary and working from donations is not selling. Donations have completely different rules in the tax law. I think it may be time to talk to an attorney about forming a non-for-profit corporation to handle the "business" side of this. However, not being a lawyer, I'm not sure of the legalities of forming a charter to preform a business conducting an illegal act. The state may reject your charter on these grounds.

This is just as murky as them trying to tax the profits from an illegal act and looks to be the beginnings of a very interesting fight toward legalization to me. You know that legalization is going to happen because of pressure such as this... not from a president who one day decides that it will be a good idea to make it legal.

Emmie

[emilya]

Anyone good at writing? If someone could write a professional letter I would copy it and send it to my legislators and anyone else I can think of. Everyone should flood every email box they can....

It has been my experience that these people do not really listen to letter writing or phone in campaigns. It is the legal system that scares them. I bet there is some hot shot tax lawyer out there who would love to take this on to set a precedent. I think you have just become a test case... and a good one at that. Lets see where this goes!

Emmie

[killerweed420]

So if you run a dispensary like a business and pay your state taxes, wouldn't you then HAVE to file a return? If you file a return then the Feds would step in...Seems the State is wanting to get the Feds involved. But how will that help the State make money?
You could and legally should file an income tax statement for the business. And like whats been stated here you don't have to disclose on your tax form what your selling. The problem is you can't really show a receipt for products purchased because federally its illegal. So you have to be good at creative bookkeeping to keep your profits down. And all this is assuming that at some date you maybe audited by the IRS.

[gypski]

Just my 2c on this, but operating a dispensary and working from donations is not selling. Donations have completely different rules in the tax law. I think it may be time to talk to an attorney about forming a non-for-profit corporation to handle the "business" side of this. However, not being a lawyer, I'm not sure of the legalities of forming a charter to preform a business conducting an illegal act. The state may reject your charter on these grounds.

This is just as murky as them trying to tax the profits from an illegal act and looks to be the beginnings of a very interesting fight toward legalization to me. You know that legalization is going to happen because of pressure such as this... not from a president who one day decides that it will be a good idea to make it legal.

Emmie

I have an inactive non-profit that I started with another mmj patient a couple of years back. Because they did some things with money I borrowed to acquire medicine to provide to patients, and they asked people I didn't know if they would start growing for it, the relationship was severed. I have the corporation documents still in my possession, and can use it to log on to the account in the sec of state web site. I could reactivate it for $10.00 but won't at this point in time. That said, when I filed and wrote up the non-profit corporation, I said our intent was to provide a non-prescription medication to a special class of medical patients. So, it is possible as most have the same type of non-profit status, and I'm sure most or many do if they are smart. :D

[hiamps]

It has been my experience that these people do not really listen to letter writing or phone in campaigns. It is the legal system that scares them. I bet there is some hot shot tax lawyer out there who would love to take this on to set a precedent. I think you have just become a test case... and a good one at that. Lets see where this goes!

Emmie

Not me, have too much to lose, just trying to help a freind. Looks as tho he is going forward, myself I would wait untill the greyness clears a bit. Will let you know if he does.

[WashougalWonder]

There was a small response today from one of them, not a canned response either. He was not aware of it and I pointed him to the article. Dead silence has followed. You can hear a pin drop. ;):D
:thumbsup:

[WashougalWonder]

The response was thus:

Here is some information that my staff found:

Are sales of "Medical Marijuana" subject to sales tax?

In the state of Washington, sales of medical marijuana are retail sales. As such, the selling price is subject to retail sales tax. In addition, the seller is subject to the business and occupation (B&O) tax under the retailing classification. This is true even if it is sold by a medical marijuana dispensary.

Sales of medical marijuana are not eligible for the retail sales tax exemption provided for prescription drugs. RCW 82.08.0281 provides an exemption from retail sales tax for certain drugs, but only when prescribed as authorized by the laws of this state. However, marijuana is a Schedule I controlled substance and cannot be prescribed under either federal or state law in Washington.

Chapter 69.51A RCW addresses medical marijuana, but does not authorize the prescription of medical marijuana. This chapter specifically avoids authorization of a prescription by referring to â??valid documentationâ?�, which does not equate with a prescription as defined in RCW 82.08.0281(4)(a), or as provided in RCW 69.50.308 (Prescriptions). Chapter 69.51A provides that it is only intended to protect qualifying patients, designated providers, and physicians from liability, prosecution, or criminal guilt when marijuana is possessed, used, provided or authorized.



With regards to dispensaries, I have been told that they are legal for the purpose of dispensing medical marijuana which then would make then eligible to be taxed.



Does that help answer your questions/address your concerns?

I have asked for further information regarding that dispensaries are in fact legal, which I have been adamant about saying they are not.......If that is the case maybe some of us folks in Clark, Skamania, and other close to Vancouver counties should get together and start a non-profit co-op in Clark County. As far as I know, there is not one here.

[gypski]

The response was thus:

I have asked for further information regarding that dispensaries are in fact legal, which I have been adamant about saying they are not.......If that is the case maybe some of us folks in Clark, Skamania, and other close to Vancouver counties should get together and start a non-profit co-op in Clark County. As far as I know, there is not one here.

Fifty bucks and articles of incorporation for a 501 (c) non-profit. do it all online at the sec of state site. :pimp:

[WashougalWonder]

Thanks, but, there are many other things involved besides just the incorporation, I would want a lawyer's advice/chat. The you have to find a place that is accepted by the appropriate city, and county. Along with all this, then you set yourself out for federal taxes and if you pay them.....well anyhow it is very spooky to this old man and I want real lawyer advice before I get involved in something of that nature. BUT I could work there....wow, a job I can do......Maybe take a chance and not throw out extras and donate for a donation?

[gypski]

Thanks, but, there are many other things involved besides just the incorporation, I would want a lawyer's advice/chat. The you have to find a place that is accepted by the appropriate city, and county. Along with all this, then you set yourself out for federal taxes and if you pay them.....well anyhow it is very spooky to this old man and I want real lawyer advice before I get involved in something of that nature. BUT I could work there....wow, a job I can do......Maybe take a chance and not throw out extras and donate for a donation?

Finding a friendly area without a bunch of assholes causing misguided or false hysteria is definitely needed along with a friendly, law understanding LEO. But, right now, until things are fleshed to be true and legal.................:D

If the state could clearly define the parameters without a bunch of needless, useless regulations things could run pretty smoothly. and nobody would need a lawyer. :thumbsup:

[WashougalWonder]

I am going to send him the link to the FAQ and have him answer that. LOL this is getting fun.

[NaturalGreen]

I am all for putting a tax on it and im sure the dispensaries would love some clarification. But how I take it dispensaries are not subject to sales tax because they are not selling anything. They are accepting donations for their services. They are subject to B&O tax which is a percentage of your gross income.

[killerweed420]

I wonder how many dispensaries let you have the product without paying a "donation"

[gypski]

I wonder how many dispensaries let you have the product without paying a "donation"

I know of one that gave a helping-hand for no charge. But, there were those who abused that and got cut off. It was the Wormhole, and I haven't been in a couple of years, but I know you got straight, honest medicine in a few different grades from them along with edibles. Good people in my book, but they might be closed to membership now. :cool:

[justpics]

I wonder how many dispensaries let you have the product without paying a "donation"

so I think the model that dispensaries are kind of copying with the whole "donation" thing is like when you donate a set level to public radio, or public television you get "gift" which is set at that donation level.

The main difference being that those "gifts" are not the main product of the non profit to which you are donating. So dispensaries are in the business of only doing that donation/gift model, where as NPR just does it as a tangential operation related to their main purpose.

[WashougalWonder]

RE: post #32 in this thread.
Still no response to last question about legality of dispensaries.