Alaska’s Anchorage Assembly is considering higher marijuana taxes and it could raise the levy from 5% to 7%.
The Assembly met on Tuesday night to discuss the proposal that was put forward by Mayor Ethan Berkowitz.
City documents have revealed that a 2% tax increase on marijuana could bring an additional $1.4 million in sales tax revenue.
Since 2016 when marijuana was approved, the city of Anchorage has not increased the tax rate on cannabis.
The proposal reads:
The attached ordinance increases the marijuana retail sales tax from 5% to 7% on the retail sales of marijuana and marijuana products, effective July 1, 2018.
Proposition No. 2 was passed by a majority of Anchorage voters on April 5, 2016, which authorized the Assembly to increase the marijuana retail sales tax rate, as described in AO 2015-143, As Amended. Specifically, the Assembly cannot adjust the marijuana tax rate more often than every two years, and cannot increase the tax rate by more than 2% at each adjustment interval. The maximum marijuana sales tax rate cannot exceed 12%. There has been no increase in the marijuana tax rate since passage in 2016.
The revenue received from the marijuana retail sales tax is outside the tax cap, and available for General Government operating budget purposes. The marijuana retail sales tax also helps diversify the Municipality’s tax base by deriving tax revenue from tourists, commuters, and others who do not pay—directly or indirectly—through real property taxes. This further helps to ensure that everyone who benefits from Municipal services contributes to associated operational costs.
