Massachusetts is set to receive a large influx of annual tax money from marijuana sales once the industry gets underway, according to the Department of Revenue.
According to the department, the state will receive up to $172 million in annual tax revenue from legal marijuana sales by 2020. Voters legalized cannabis last year, but cannabis retail outlets aren’t expected to be open until next year.
The numbers are based on a 12% tax rate; this includes the standard 6.25% sales tax, a 3.75% excise tax and a 2% city-wide tax. Nevada lawmakers may still raise this to a higher tax rate, however. According to the department, if lawmakers raise the excise tax from 3.75% to 5%, the state would garner an additional $11 million in annual taxes.
The nearly $200 million in annual taxes from marijuana sales estimated by the Department of Revenue would be Massachusetts tax earnings for marijuana on par with what is earned in Colorado and Washington. In 2016 Colorado garnered just shy of $200 million in marijuana taxes. Washington, which has a higher tax rate, garnered around $260 million in taxes from marijuana sales.
In the first year of legal marijuana sales in Massachusetts, as things are getting established, the department expects the state to earn up to $64 million in taxes.