Counties Target a Four Percent Sales Tax if Cannabis Becomes Legal in New York

[dropcap class=”kp-dropcap”]G[/dropcap]ov. Andrew Cuomo’s proposal to legalize adult-use cannabis is expected to reach a decision sometime next month in the New York State Capitol. If cannabis is legalized in New York, it will be one of the first states to do so through the legislative process rather than by voter referendum, meaning, the lawmakers would have the unique opportunity to craft the legislation the way they see fit; they would have the flexibility to respond to local needs, anticipate the outcome of legalization and draft the legislation accordingly.

The governor proposes to impose three taxes on recreational cannabis. The first on cannabis cultivation, the second on the sale by a wholesaler to a retail dispensary and the third is a local two percent sales tax.

However, the governor’s proposed two percent local revenue share is predicted to be inadequate for the counties to provide the public services that they will be expected to offer  to ensure public health and safety—services such as education, traffic safety, addiction facilities and other programs that have proven to mitigate the adverse effects of legal psychoactive substances (like alcohol) would require more funding than what has been proposed.  

The New York State Association of Counties (NYSAC) urged the state to increase the local sales tax to four percent following the footsteps of states with a successful legal cannabis structure. Counties would use the revenue from this tax to counterbalance and combat costs associated with legalization.

“It is crucial that the state provide local governments with adequate resources to manage the impacts of adult-use cannabis legalization,” said NYSAC Executive Director Stephen Acquario. “Only with sufficient funding will local governments be able to work in partnership with the state to oversee public health, public safety, criminal justice, consumer protection and economic development.”