Is medical marijuana medicine or not? Is a doctors recommendation a prescription? When is a sale really a donation? And why is the Washington state taxman the one asking these questions? Because Uncle wants his money, that’s why.
“Some in the pot community have encouraged dispensaries to pay taxes as a means of achieving legitimacy. But Seattle medical marijuana lawyer Douglas Hiatt said he doesn’t believe the state can tax medical marijuana sales, nor would he allow one of his clients to cooperate with an audit.
When the Department of Revenue recently tried to require one of his clients to pay taxes, Hiatt said he threatened to litigate, and the department backed down.
“There’s no way they can do this,” Hiatt said. “DOR doesn’t have the power to tax marijuana. It’s not only that you can’t tax it because it’s illegal, it’s that you can’t tax it because it’s medicine. There’s an exemption for prescription medicine under state law, and an authorization is the functional equivalent of a prescription.”
The tax department representative Gowrylow said state law doesn’t consider medical marijuana a prescription drug. Hiatt and others have also argued that dispensaries are not selling the drug but exchanging items as part of a cooperative. None of that really matters from a tax standpoint, Gowrylow said, because there is an exchange of value taking place.
Steve Sarich, who runs a medical marijuana establishment in Seattle called Access 4 Washington, said any money exchanged at his facility is a donation to the collective effort of producing the marijuana. He noted that it is illegal to sell marijuana under both state and federal law, so it would be problematic for any medical marijuana provider to claim sales of the drug.
“If you pay sales tax, you’re admitting to sales,” Sarich said. “I wouldn’t advise anyone to do that.”
Original source material is HERE.
[image: Google images Washington]
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