ALBANY, NY – New York Governor Kathy Hochul has proposed a tax plan aimed at supporting the state’s legal adult-use cannabis industry, according to Syracuse.com.
As part of her state budget that would take effect April 1, Hochul is recommending repealing and replacing New York’s cannabis potency tax with a 9% wholesale excise tax, which the state’s cannabis distributors would collect.
Currently, according to the report, distributors must pay half a cent per milligram of the amount of total THC for flower; eight-tenths of one cent per milligram for concentrates and three cents per milligram for edibles, along with a 9% sales tax and municipal taxes of 4% of retail sales. Under the governor’s plan, distributors would instead pay the 9% excise tax, while retailers would continue paying sales and municipal taxes.
“To promote and support the expansion of the legal adult-use cannabis market, the executive budget simplifies, streamlines and reduces the tax collection obligations and burden for cultivators, processors and distributors by repealing the wholesale THC potency tax,” said Hochul.
Industry experts said the plan would significantly reduce record-keeping costs for the state and its cannabis businesses, and lower overall taxes for the industry.
The proposal was applauded by the Cannabis Association of New York, (CANY) which has been lobbying for replacement of the potency tax with an excise tax. It said the new plan would leave cannabis businesses with a tax rate of about 30 percent.
“Of course we will continue to advocate for a lower tax rate, however we believe that is a good start to a final solution,” CANY President Damien Cornwell was quoted as saying. “It is a validation that the governor and Department of Budget tacitly agree with our general concept of restructuring the potency tax.”