As many of you know by now, on January 18, 2018, the Michigan Department of Treasury issued REVENUE ADMINISTRATIVE BULLETIN 2018-2. This document spells out the State’s tax policy regarding new commercial cannabis businesses, patients and caregivers.
Among the conclusions Treasury officials reached and published in that document was the determination by the Department that the implementation of a 6% use tax applied to the price patients pay their caregivers for medical cannabis products was the proper policy. Below is the rationale the Department used to justify this new PATIENT TAX.
The GSTA and UTA exempt the “sale of drugs for human use that can only be legally
dispensed by prescription.” However, this exemption does not apply to the sale, use,
storage, or consumption of marihuana or marihuana-derived products because at the time
of the sale they are not dispensed pursuant to a prescription. Rather, a qualifying patient
presents a registry identification card indicating that a physician has certified that the
patient has a debilitating medical condition.
Essentially, the Treasury Department is saying that because medical cannabis is “recommended” and not “prescribed”, transfers between patients and caregivers are subject to a 6% use tax to be paid by the purchasing patient. They expect patients to add up all their purchases during the course of the year, multiply the total amount they paid their caregiver by 6%, and claim that total on your annual state income tax return.
Well that’s all fine and dandy for the state, but it sucks for patients! And did you even know about this change? Probably not. The Treasury Department didn’t send any announcement of this policy change to patients. The State’s Licensing And Regulatory Affairs (LARA) and the Bureau of Medical Marihuana Regulation (BMMR) failed to issue any new tax policy notification to patients. How were the 300,000 patients who participate in the program supposed to find out about this new tax policy?
There are a lot of questions for policy makers in this state regarding the creation and implementation of this new 6% PATIENT TAX, sadly they don’t feel the need to respond to patient questions. So to make sure that Michigan’s medical cannabis patients are heard on this issue, we have created an email campaign that will assist patients with sending an email to their state legislators and the Director of the Treasury about this important issue.
Next Monday, February 12, 2018, Michigan NORML will begin a campaign to REPEAL THE 6% PATIENT TAX, and we could sure use your help! The only way our legislators will even consider changing this policy is if we, patients and caregivers, flood their offices with calls and emails. Watch for our ACTION ALERTS about this issue and please take 5 minutes to send emails to your legislators and Treasury Director Nick Khouri. We can provide the tools to help you, but it’s really important now that you start helping yourself now. Please send the emails and make the calls, otherwise good people will face tax evasion charges because of this predatory tax policy.