As public opinion over marijuana use has shifted over the past 4 decades, so has law surrounding it. Two-thirds of Americans say the use of marijuana should be legal, reflecting a steady increase over the past decade, according to a new Pew Research Center survey.
State of Michigan marijuana taxes for business owners
Michigan legalized recreational marijuana use with a ballot initiative effective December 2018. The initiative laid out a 10 percent excise tax. Localities can also levy an additional tax, mostly as an excise tax on retail sales.
Learn more about the corporate income tax, flow-through withholding tax, and individual tax in Michigan.
How does the federal government collect taxes on marijuana?
There are tax pitfalls for being a cannabis business owner. Because marijuana is federally prohibited, business owners have to report financials like a business that is trafficking in a controlled substance. It is very different than for state purposes.
Since marijuana is illegal under federal law, cannabis businesses in the United States still pay federal taxes on gross income.
And, by law, cannabis business owners cannot claim any deductions or credits for business expenses, so the tax rate can run up to 90%.
Contact the experts at Morgan & Associates if you have more questions about state or federal taxation.