Oregon Gov. Tina Kotek To Cannabis Businesses: Pay Your Taxes Or No License Renewals

In an effort to ensure fairness and boost tax compliance within Oregon's cannabis industry, Gov. Tina Kotek announced a game-changing move.

Beginning immediately, businesses that have neglected their tax obligations will be prohibited from obtaining or renewing licenses to sell marijuana. “This will help ensure that all businesses are operating under the same rules and not getting any competitive advantage if they haven’t paid their taxes,” Kotek said.

A Closer Look At The Gov.'s Decision

With an estimated $18.7 million in retail tax revenue unaccounted for in the previous fiscal year, the state's Department of Revenue is counting on this measure to rectify the situation and replenish their coffers.

Under the new requirements, cannabis retailers must provide proof of tax payment by obtaining a certificate of compliance from the Oregon Department of Revenue. This certificate will then be submitted to the Oregon Liquor and Cannabis Commission (OLCC) as part of the license application and renewal process.

While the agencies did not disclose specific retailers involved, they emphasized that noncompliance remains a relatively minor issue within the industry.

Craig Prins, executive director of the OLCC, acknowledged that the majority of cannabis businesses diligently fulfill their tax obligations and stressed the importance of recognizing their compliance. However, data from the Department of Revenue reveals that dispensaries have a delinquency rate of 9%, significantly higher than the 3% rate observed in other business sectors.

Interestingly, approximately 11% of dispensaries with tax debt have established approved payment plans with the Department of Revenue.

Meanwhile, state Sens. Brian Boquist and Art Robinson called for an investigation by the U.S. Attorney's office into cash donations from cannabis company owners to politicians in the state.  

They are concerned about possible political corruption and want the prosecutor to look into connections between these donations, federal drug laws and the involvement of financial institutions. While cash contributions are not illegal under Oregon's campaign laws, the senators highlight the potential for misconduct and the obligation of financial institutions to report large deposits. 

“Many of these cash campaigns or other donations exceeded $10,000 from federally illegal drug operations,” reads the letter sent by the two senators. 

The U.S. Attorney's office acknowledged the letter and an investigation is underway. Oregon is committed to addressing tax compliance issues and protecting the interests of its citizens.

Related News

La Mota Attorney Resigns From Oregon Cannabis Association, Four New CEOs & More Industry Appointments

Oregon Secretary Of State Shemia Fagan Resigns Over Lucrative Yet Controversial Cannabis Job

Photo: Courtesy Of Markus Winkler On Unsplash