First Oregon marijuana tax revenues being distributed

(More from Dept. of Revenue on cities/counties share)

The first distributions of state marijuana tax revenues — totaling nearly $85 million — are on their way to the State School Fund; the Mental Health, Alcoholism, and Drug Services Account; the Oregon State Police; the Oregon Health Authority, and Oregon’s cities and counties.

All distributions will be complete by next Wednesday, Oregon Department of Revenue officials said Friday.

Between January 4, 2016 and August 31, 2017, the Department of Revenue collected $108.6 million in state and local marijuana taxes, of which $94.55 million was state marijuana taxes eligible for distribution. Local taxes collected by the department on behalf of cities and counties are distributed to them quarterly.

Of the revenue eligible for distribution, $9.56 million went to transfers required under Senate Bills 1057 and 1597, repaying the Oregon Liquor Control Commission’s start-up costs, and covering administrative costs for the Department of Revenue. The remaining $85 million was distributed based on the recipients and formulas provided in House Bill 3470:
State School Fund–40 percent = $34 million.
Mental Health, Alcoholism, and Drug Services Account–20 percent = $17 million.
OSP–15 percent = $12.75 million.
OHA–5 percent = $4.25 million.
Cities and counties–10 percent each = $17 million.

Distributions to cities and counties are a bit more complicated, as there are two formulas for calculating the amounts due to them: one for revenue collected before July 1, 2017 and the other for collections on or after that date.

Of the overall distribution, Oregon’s cities and counties will receive a total of $17 million (10 percent to cities and 10 percent to counties). The portions of the pre-July 2017 revenue due to individual cities and counties were based on that city or county’s population.

The distribution formula that applies to tax revenues collected starting July 1, 2017 takes factors other than just population into consideration. For cities, only municipalities allowing all license types are eligible for a portion of the 10 percent. For eligible cities, their share will be based on population (75 percent) and the sum of grower, wholesaler, processor, and retailer licenses (25 percent).

For counties’ share, half is based on the total available grow canopy area in the county and half is based on the sum of wholesaler, processor, and retailer licenses. Counties that opt out of marijuana grows are ineligible for the part of the distribution based on grow canopy area. Counties that opt out of wholesaler, processor, or retailer licenses are ineligible for the part of the distribution based on license count.

Cities and counties will get a portion of the taxes collected prior to July 1, 2017 regardless of whether they allow recreational marijuana businesses to operate in their locality.

For taxes collected on or after July 1, 2017, if a city prohibits licensed producers, processors, wholesalers, or retailers from doing business in the city, they aren’t eligible for any of the 10 percent distributed for cities.

For counties, if they don’t allow licensed producers to operate, they aren ‘t eligible for the half of the 10 percent based on canopy size because there wouldn ‘t be any grow canopy attributable to that county.

If they don’t allow wholesaler, processors or retailers to operate within the county, there aren ‘t any licensees in their county to make them eligible for the half of the 10 percent based on licensee numbers.

For more information about state and local recreational marijuana taxes, visit www.oregon.gov/dor/marijuana or contact the Department of Revenue’s Marijuana Tax Program by phone at (503) 947-2597 or email at marijuanatax.dor@oregon.gov. For questions about licensing for recreational marijuana retailers, visit the Oregon Liquor Control Commission’s (OLCC) website at www.oregon.gov/olcc/marijuana.