Cannabis tax revenue is becoming more significant as legal sales grow. The tax is far from a budgetary panacea, but an ITEP analysis of revenue data reported by the seven states with legal cannabis sales underway suggests that excise and sales tax revenues from the sale of the drug could reach $1.6 billion this year.
Carl Davis
Carl Davis is the research director at ITEP, where he has worked since 2008. Carl works on a wide range of issues related to both state and federal tax policy. He has advised policymakers, researchers, and advocates on tax policy issues in nearly every state. Much of his work relates to the link between taxes and economic growth, and the shortcomings of dynamic scoring and supply-side economic theories.
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blog August 7, 2019 State and Local Cannabis Tax Revenue on Pace for $1.6 Billion in 2019
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media mention July 27, 2019 Chattanooga Times Free-Press: Yet Again, Tennessee Combined State, Local Sales Tax Rates Nation’s Highest
While the sales tax is the workhorse of Tennessee’s budget, it’s also seen by critics as a “regressive tax” in that it takes a larger percentage of income from the… -
media mention July 25, 2019 Filter: Kamala Harris Cannabis Legalization Bill Is Also About Immigrant Justice
While some critics, like Carl Davis, the research director of the Institute on Taxation and Economic Policy, argue that Harris’s bill would just be a tax-cut for Big Marijuana, the… -
media mention July 24, 2019 Politico: Taxing the Pot
So how might this actually be a tax cut? By removing marijuana from the controlled substance list, Harris and Nadler would also make legitimate businesses eligible to deduct routine business… -
media mention July 24, 2019 Anchorage Daily News: As Alaska’s Budget Uproar Rolls on, a Top Dunleavy Adviser Has Seen It Before
Arduin, Laffer & Moore has been criticized by economists for what some see as less than rigorous methods. One Oklahoma study on eliminating the state’s personal income tax produced by… -
media mention July 23, 2019 KCBS: Kamala Harris’ Pot Proposal Would Reduce Tax Revenue, Expert Predicts
Harris’ proposal would impose a 5% federal tax on pot to pay for new social justice program. Her legislation would also extend significant income tax deductions that have been unavailable to… -
media mention July 17, 2019 CNBC: Blue states file suit against IRS over rules on SALT workarounds
Whether the final rule will ultimately deter people from donating to these funds remains to be seen. “If you’re really passionate about private school vouchers in Georgia, you donate and… -
media mention July 3, 2019 Business Insider: Gas and Diesel Prices Rose at the Worst Possible Time for Drivers in the US and These States Are Being Affected Most
For some states, the gas tax increase has been long delayed. Some states have postponed this increase for several years due to the political challenges, Carl Davis, a research director… -
media mention July 2, 2019 Pacific Standard: Developers Aren’t Reporting How They’re Using Tax Incentives Meant for Low-Income Areas
Even for those who have tracked the bill closely, the reporting process remains opaque. “This bill was thrown together so incredibly quickly—there weren’t hearings on it, these types of questions… -
blog July 1, 2019 Gaps in Sales Tax Collection Linger at Amazon.com and Among Other E-Retailers
The last few years have brought big changes to sales tax collection for purchases made at Amazon.com and other e-retail websites. As recently as 2011, Amazon was only collecting sales tax on its direct sales in five states – a fact that gave the company a competitive edge over brick and mortar stores during a critical time in its growth. Today, Amazon is collecting state-level sales taxes on all its direct sales, but it still usually fails to collect sales tax on the large volume of sales it makes through the “Amazon Marketplace.” This points to a broader problem in state tax enforcement that lawmakers should move quickly to address.
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news release June 27, 2019 Travelers in 12 States Will Pay More in Gas Taxes Beginning Monday
Drivers in 12 states who hit the road during this summer driving season will be paying more in gas tax beginning Monday, July 1.
While the federal gas tax has remained stagnant for nearly 26 years, many states have stepped up and increased their taxes so they can raise revenue to fund infrastructure and other projects. California, Indiana, Maryland, Michigan, Montana, Nebraska, Ohio, Rhode Island, South Carolina, Tennessee and Vermont all will raise their gas taxes.
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blog June 27, 2019 Gas Taxes Rise in a Dozen States, Including an Historic Increase in Illinois
On July 1, 12 states will boost their gasoline taxes and 11 will boost their diesel taxes. The reasons for these increases vary, but they’re generally intended to fund maintenance and improvement of our nation’s transportation infrastructure–a job at which Congress has not excelled in recent years.
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blog June 27, 2019 Most States Have Raised Gas Taxes in Recent Years
Ohio now enjoys the distinction of being the 30th state to raise or reform its gas tax this decade, and the third state to do so this year, under a bill signed into law by Gov. Mike DeWine. While state tax policy can be a contentious topic, there has been a remarkable level of agreement on the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies. These actions are helping reverse losses in gas tax purchasing power caused by rising construction costs and improvements in vehicle fuel efficiency.
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brief June 27, 2019 Most Americans Live in States with Variable-Rate Gas Taxes
The flawed design of federal and state gasoline taxes has made it exceedingly difficult to raise adequate funds to maintain the nation’s transportation infrastructure. Twenty-eight states and the federal government levy fixed-rate gas taxes where the tax rate does not change even when the cost of infrastructure materials rises or when drivers purchase more fuel-efficient vehicles and pay less in gas tax. The federal government’s 18.4-cent gas tax, for example, has not increased in over 25 years. Many states have waited a decade or more since last raising their own gas tax rates.
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blog June 24, 2019 The SALT Cap Isn’t Harming State and Local Revenues. Myths About It May Be.
A House Ways and Means subcommittee hearing on Tuesday will explore a highly controversial provision of the Tax Cuts and Jobs Act (TCJA) that prevents individuals and families from writing off more than $10,000 in state and local tax (SALT) payments on their federal tax forms each year. The focus of the hearing will be whether the cap negatively affects state and local revenue streams that fund schools, firefighters, and other services. There are at least three ways this could happen though only one of those is plausible, and it’s not the one that the organizers of this hearing likely expected.
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media mention June 13, 2019 KEYE TV: Colorado made $1B in marijuana tax revenue: What could this mean for federal legalization?
Tax experts explained that government revenue from cannabis is not a panacea for solving the country’s budget issues, but it could certainly help. According to a study by Carl Davis,… -
media mention June 12, 2019 CNBC: Feds block tax breaks for donating to these charitable state funds
These programs range from conservation easements to private school tuition scholarships. “The private school organizations were asking for full-scale carveouts for themselves; they wanted to be exempt if the program… -
news release June 11, 2019 Treasury Regulations Address Long-Standing Tax Loophole
Following is a statement by Carl Davis, research director at the Institute on Taxation and Economic Policy, regarding Department of Treasury regulations released today to address state policies that allow… -
blog June 11, 2019 New SALT Workaround Regulations Narrow a Tax Shelter, but Work Remains to Close it Entirely
Today the Internal Revenue Service (IRS) released its final regulations cracking down on a tax shelter long favored by private and religious K-12 schools, and more recently adopted by some… -
blog June 5, 2019 ITEP Resources on Proposed SALT Workaround Regulations
After states implemented laws that allow taxpayers to circumvent the new $10,000 cap on deductions for state and local taxes (SALT), the IRS has proposed regulations to address this practice. It’s a safe bet the IRS will try to crack down on the newest policies that provide tax credits for donations to public education and other public services, but it remains to be seen whether new regulations will put an end to a longer-running practice of exploiting tax loopholes in some states that allow public money to be funneled to private schools.
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blog May 21, 2019 Gas Taxes Have Gone Up in Most States, but Decades-Long Procrastinators Remain
The upcoming Memorial Day weekend marks the start of the traditional summer driving season. In most states, summer road-trippers are paying more gas tax than they did a few years ago and are benefiting from smoother and safer roads as a result. In total, 30 states have raised or reformed their gas taxes in the last six years.
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May 10, 2019 Presentation: NCSL Task Force on State and Local Taxation, Taxing Cannabis
ITEP Research Director Carl Davis presented to the National Conference of State Legislatures (NCSL) Task Force on State and Local Taxation on approaches to cannabis taxation and the recent report Taxing Cannabis.
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media mention May 5, 2019 Crain’s Detroit Business: If Whitmer’s Gas Tax Increase Is Dead, Sales Tax on Services, Anyone?
Car rentals at Detroit Metro Airport are subject to the sales tax. But ordering a ride from an Uber driver at the airport is exempted from sales tax because it’s… -
media mention April 30, 2019 Washington Post: Democrats Said a GOP Tax Law Provision Would Devastate Blue States. That’s Not Happening.
“A lot of these claims were knee-jerk, political reactions,” said Carl Davis, a tax analyst for the Institute on Taxation and Economic Policy, a left-leaning think tank. “Some perspective is needed on some of the wild claims about how it would damage blue states’ economies.”
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media mention April 15, 2019 Minnesota Public Radio: Are Minnesotans Happy with President Trump’s Tax Cuts?
Carl Davis, ITEP’s research director, participated in this half-hour segment on how the public feels about the 2017 Trump-GOP tax cuts. Listen here or get more info here: https://www.mprnews.org/listen?name=/minnesota/podcasts/kerri-miller/2019/04/15tax_day_20190415_64.mp3