State Tax Snapshot: Tokers, Smokers, and Fuming Pro Golfers


Bloomberg.com recently updated its annual slideshow, “Most & Least Taxing States 2013,” which highlights the odd and noteworthy in state taxation.  Much of state tax policy appears to be up in smoke as Colorado and Maine work through the haze of taxing marijuana sales. When it comes to taxing more conventional smokes, states such as Missouri and Utah are taking diametrically opposed positions. Meanwhile, the old saying regarding death and taxes remains true But at least Georgia residents are no longer subject to the state’s  “birthday tax.” Also, find out what prompted pro-golfer Phil Mickelson to seek to drive state tax policy.

In Colorado, after voters approved a constitutional amendment to legalize the use and possession of up to one ounce of marijuana for those over 21, the state is now dealing with how to tax marijuana. A legislative panel recently said that pot could be taxed at rates above 30 percent (a 15 percent excise tax, plus a 15 percent sales tax, plus any local taxes), but the rate is subject to voter approval, reports the Denver Post.

Also dealing with marijuana, Maine Revenue Services  issued an opinion in 2011 advising that although medical marijuana is generally subject to a 5 percent tax, medical-marijuana-laced brownies are subject to a 7 percent tax, considering these brownies to be “prepared foods,” the Bangor Daily News explains.

In tobacco news, Missourians last year rejected a voter initiative to raise the excise tax on tobacco to 90 cents, thus maintaining the lowest excise tax on cigarettes in the country at only 17 cents per pack. Similarly, while Minnesotans also pressured Gov. Mark Dayton (D) to drop his proposal to increase cigarette taxes, Utah increased its tax on cigarettes in 2011 just over $1 per pack up to $1.70, and recently proposed adding a tax on electronic cigarettes as well. This would continue Utah’s tendency towards “sin” taxes, along with its 10 percent taxes on alcohol as well as businesses that feature nude performances.

In non-smoking updates, Georgia recently amended a tax it imposes based on the value of the taxpayer’s car, known as the “birthday tax” because of its annual due date on each taxpayer’s birthday. As of March 1, the tax no longer applies to those who buy new cars, although those buyers will have to pay a one-time title tax instead.

And finally, as golf weather has finally arrived, last November, California voters approved Proposition 30 to raise the state’s top income bracket to 13.3 percent, the highest in the nation, much to the chagrin of PGA Tour pro Phil Mickelson, who threatened to follow in Tiger Woods’ shoes and leave the state for one with a less burdensome income tax.

By Michael Kerman

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