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Marijuana tax revenue is here

October 25, 2017

First marijuana tax revenue distributions coming soon

The first distributions of state marijuana tax revenues—totaling nearly $85 million—are on their way to the State School Fund; the Mental Health, Alcoholism, and Drug Services Account; the Oregon State Police (OSP); the Oregon Health Authority (OHA); and Oregon’s cities and counties.

Between January 4, 2016 and August 31, 2017, the Department of Revenue collected $108.6 million in state and local marijuana taxes, of which $94.55 million was state marijuana taxes eligible for distribution. Local taxes collected by the department on behalf of cities and counties are distributed to them quarterly.

Of the revenue eligible for distribution, $9.56 million went to transfers required under Senate Bills 1057 and 1597, repaying the Oregon Liquor Control Commission’s start-up costs, and covering administrative costs for the Department of Revenue. The remaining $85 million was distributed based on the recipients and formulas provided in House Bill 3470:

• State School Fund—40 percent = $34 million.
• Mental Health, Alcoholism, and Drug Services Account—20 percent = $17 million.
• OSP—15 percent = $12.75 million.
• OHA—5 percent = $4.25 million.
• Cities and counties—10 percent each = $17 million.

Distributions to cities and counties are a bit more complicated, as there are two formulas for calculating the amounts due to them: one for revenue collected before July 1, 2017 and the other for collections on or after that date.

Of the overall distribution, Oregon’s cities and counties will receive a total of $17 million (10 percent to cities and 10 percent to counties). The portions of the pre-July 2017 revenue due to individual cities and counties were based on that city or county’s population.

The distribution formula that applies to tax revenues collected starting July 1, 2017 takes factors other than just population into consideration. For cities, only municipalities allowing all license types are eligible for a portion of the 10 percent. For eligible cities, their share will be based on population (75 percent) and the sum of grower, wholesaler, processor, and retailer licenses (25 percent).

For counties’ share, half is based on the total available grow canopy area in the county and half is based on the sum of wholesaler, processor, and retailer licenses. Counties that opt out of marijuana grows are ineligible for the part of the distribution based on grow canopy area. Counties that opt out of wholesaler, processor, or retailer licenses are ineligible for the part of the distribution based on license count.

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