How Is Marijuana Taxed in Connecticut?Marijuana businesses in Connecticut, including cultivators, retailers, manufacturers, delivery services, and testing laboratories, are subject to both the state sales tax and the municipal sales tax.
The Connecticut Department of Revenue Services imposes a 6.35% sales tax on marijuana products. Marijuana retailers must register with the DRS to collect and remit the sales tax to the state.
Additionally, municipalities may impose additional local taxes on marijuana products. The local sales tax rate varies depending on the municipality. For example, in Hartford, the local marijuana sales tax is 5%.
What Is The Tax Rate For Recreational Marijuana in Connecticut?The tax rate for recreational marijuana in Connecticut is currently set at 12%.
Are Medical Marijuana Products Subject To Taxation in Connecticut?Yes, medical marijuana products are subject to taxation in Connecticut. The state’s medical marijuana program is subject to the Connecticut Excise Tax, which is a 6.35% sales tax applied to the retail sale of all tangible personal property and selected services. This tax rate is applicable to all medical marijuana products sold in the state.
What Are The Specific Taxes Applied To Marijuana Sales in Connecticut?In Connecticut, the taxes associated with marijuana sales are a combination of a flat rate tax imposed at the retail level and a local excise tax imposed by local municipalities. The retail level tax is currently set at 12.00% of the price of the retail marijuana product sold at the point of sale. Additionally, any municipality that allows for the sale of marijuana may impose an additional local excise tax at their discretion, with a rate no greater than 3.00%.
Is There A Difference In Taxation Between Marijuana Flowers And Marijuana-Infused Products in Connecticut?Yes, there is a difference in taxation between marijuana flowers and marijuana-infused products in Connecticut. Marijuana flowers are subject to Connecticut’s sales and use tax of 6.35%, while marijuana-infused products are subject to the same sales and use tax as well as a special marijuana product tax of 25%. The additional tax on marijuana-infused products applies to edibles, tinctures, concentrates, capsules, patches, and topicals.
How Do Local Governments Participate In The Taxation Of Marijuana in Connecticut?Local governments in Connecticut do not have the authority to impose their own marijuana taxes. However, they may impose local sales and use taxes on the retail sale of marijuana and marijuana products in their jurisdictions. These taxes are collected by the Connecticut Department of Revenue Services and are distributed to the jurisdiction where the tax was collected. Local governments must also follow state regulations for the collection of these taxes and must submit reports to the Department of Revenue Services.
Are There Additional Excise Taxes On Marijuana At The State Or Local Level in Connecticut?Yes, there are additional excise taxes on marijuana at the state and local level in Connecticut. The state of Connecticut imposes a 7.5% Excise Tax on any retail marijuana sales made in the state. This tax is collected from both medical and recreational marijuana dispensaries. Additionally, Connecticut has adopted a local option tax whereby local municipalities can impose an additional 2% local excise tax on retail marijuana sales within their respective jurisdictions.
What Is The Revenue Generated From Marijuana Taxation Used For in Connecticut?The revenue generated from marijuana taxation in Connecticut is used to fund substance abuse treatment services. It is also used to fund public education and prevention programs, as well as research related to marijuana use and its effects. Additionally, revenue may be used to make payments to local governments for their participation in the regulation of marijuana businesses.
Are There Tax Exemptions Or Reductions For Medical Marijuana Patients in Connecticut?No, at the current time, there are no tax exemptions or reductions for medical marijuana patients in Connecticut.
Is There A Difference In Taxation For Homegrown Marijuana Versus Purchased Marijuana in Connecticut?Yes, there is a difference in taxation for homegrown marijuana versus purchased marijuana in Connecticut. Homegrown marijuana is not subject to the state’s sales and use tax, whereas any purchased marijuana is subject to the state’s 8.25% sales and use tax. Additionally, medical marijuana purchases are not subject to the sales and use tax.
What Is The Impact Of Marijuana Taxation On The Price Of Marijuana Products in Connecticut?The impact of marijuana taxation on the price of marijuana products in Connecticut is highly dependent on the specific type of product being sold and the tax rate. In general, the higher the tax rate, the higher the cost of marijuana products. This is especially true for products containing high levels of THC, as the taxes are typically based on THC content. Additionally, the taxation rate may differ depending on the type of sale (e.g. recreational versus medical) as well as whether or not the particular product is taxed at a flat or ad valorem rate. The overall impact of marijuana taxation on prices in Connecticut is likely to result in an increase in prices, however, this will vary depending on the type of product and the tax rate.
Are There Tax Incentives For Licensed Marijuana Businesses in Connecticut?Yes, there are tax incentives for licensed marijuana businesses in Connecticut. The state offers both sales tax and income tax exemptions to businesses that produce, produce extracts, or retail marijuana and marijuana products. The sales tax exemption applies to any retail sale of marijuana or marijuana products made by a producer or retailer. The income tax exemption applies to any income earned by a producer or retailer from the sale of marijuana or marijuana products.
How Do States Track And Collect Taxes On Marijuana Sales in Connecticut?In Connecticut, the Department of Revenue Services (DOR) is responsible for tracking and collecting taxes on marijuana sales. In order to do so, licensed marijuana retailers must register with the DOR and obtain a Retail Marijuana Establishment license. This license requires the marijuana retailer to track and report all taxable sales to the DOR. Furthermore, the marijuana retailer must pay taxes based on the applicable rate and file returns with the DOR on a quarterly basis. The state also requires all marijuana retailers to obtain a unique identifier number for tracking and reporting purposes. Finally, Connecticut has implemented a special tax on medical marijuana, which must be collected and reported separately from other taxes.
What Are The Penalties For Tax Evasion Or Non-Compliance By Marijuana Businesses in Connecticut?The penalties for tax evasion or non-compliance by marijuana businesses in Connecticut are similar to those of other businesses, including fines and/or imprisonment. According to Connecticut General Statutes § 12-724(a)(1), any person who willfully fails to make, render, sign, or subscribe any return, statement, or other document, or who willfully makes any false or fraudulent return or statement is guilty of a class D felony. Furthermore, anyone who willfully attempts in any manner to evade or defeat any tax imposed by the state of Connecticut is subject to a fine of up to $5,000 or imprisonment for up to five years, or both. The penalty for failing to pay taxes due to the Department of Revenue Services can also include a civil penalty up to 200% of the amount not paid. Additionally, the Department may impose a penalty of up to 15% of the amount not paid for each month the tax remains delinquent.
Is There A Tax On Marijuana Cultivation Or Production in Connecticut?No, there is currently no tax on marijuana cultivation or production in Connecticut. As of October 1, 2020, the sale of recreational marijuana is still illegal in Connecticut.
Are Marijuana Edibles And Infused Products Subject To Additional Taxes in Connecticut?Yes. All marijuana edibles and infused products are subject to a 7.5% Connecticut sales tax and any additional local taxes that may be imposed.
What Is The Overall Economic Impact Of Marijuana Taxation in Connecticut?The overall economic impact of marijuana taxation in Connecticut is still very much unknown. While the state has yet to establish a legal recreational marijuana market, it has taken steps towards legalizing medical marijuana and has been collecting taxes on the sale of medical marijuana since 2015. The state has reported that it has collected over $10 million in revenue from medical marijuana taxes since its inception. The potential economic impact of legalizing recreational marijuana in Connecticut is largely unknown, as no studies have yet been done to estimate potential tax revenue or spending associated with a regulated marijuana market.
How Does [State Name] Compare To Other States In Terms Of Marijuana Tax Rates And Revenue in Connecticut?In Connecticut, marijuana taxes are among the most expensive in the nation. Cannabis products are taxed at a 20% rate at the point of sale. This is significantly higher than the average state marijuana tax rate of approximately 15%. In addition to this, local municipalities in Connecticut can levy their own taxes at up to 3%, bringing the total rate up to 23%.
Despite the high tax rate, marijuana revenue has been relatively low in Connecticut. According to the Connecticut Office of Policy and Management, total marijuana sales in 2020 were just $114.8 million, resulting in only $23.7 million in tax revenue. This puts Connecticut firmly at the bottom of the list when it comes to marijuana tax revenue. Other states such as California ($1.2 billion), Colorado ($302 million), and Washington ($434 million) generate far more revenue from their marijuana taxes.