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Cannabis Tax Revenue Is Overwhelming Oregon’s Tax Office

Oregon’s adult-use cannabis program is taking in so much tax money that it’s affecting day-to-day operations at the Oregon Department of Revenue in Salem. On Thursday, the department announced adjustments to the payment process because officials have been running into issues with cannabis business owners paying their taxes in person.

Oregon officials estimate that they’ll take in around $43 million in tax revenue from recreational cannabis this year. The tax adult-use sales at dispensaries went into effect on Jan. 4, 2016. More than $10.5 million in tax revenue came in during the first quarter of 2016.

Because many cannabis businesses have limited or no access to traditional banking services, they end up making their tax payments in cash. Doing that requires booking an appointment with the Department of Revenue. And those are becoming harder to come by.

For example, appointment slots late in the month are usually all full, which leaves the commission little to no time between appointments. So, if one of the appointments runs over the scheduled time—like if someone shows up late for their appointment, or brings in a larger payment than originally planned for, it can put the commission behind schedule for the rest of the day.

The state accepts cannabis tax in several different forms: check, money order, or cash. Business representatives paying in cash must call for an appointment at least 48 hours in advance. (That number is 503-945-8050.)

To help make payment processing more efficient, keep these tips to keep in mind:

  1. If possible, schedule your appointment for earlier in the month. This is particularly important if you’re paying on behalf of multiple locations, because it will take longer for the department to process multiple payments.
  2. Schedule your appointment at least 48 hours in advance. Consider setting up the next monthly appointment at the end of the current month’s appointment.
  3. Arrive at the scheduled time with your payment voucher filled out fully and correctly.
  4. Bring the money sorted by denomination, facing the same way, and ready to be counted.

The department reserves the right to reject any payment from businesses that don’t abide by the commission’s requirements, listed here.

Oregon’s tax rate for adult-use cannabis ranges from 17 to 20 percent. Legislation set the base tax rate at 17 percent. Under certain circumstances, cities and counties may add up to an additional 3 percent local tax.

 

Correction: An earlier version of this version of this story misidentified the agency responsible for accepting tax payments. It is the Oregon Department of Revenue, not the Oregon Liquor Control Commission.