State agency reverses position on ‘stacking’ marijuana sales taxes

By Buck Collier, Special Correspondent
Posted 2/22/23

HERMANN —  After a sudden outcry by Missouri’s county government officials and quick intervention by state legislators, the state’s Department of Revenue (DOR) has reversed its …

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State agency reverses position on ‘stacking’ marijuana sales taxes

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HERMANN —  After a sudden outcry by Missouri’s county government officials and quick intervention by state legislators, the state’s Department of Revenue (DOR) has reversed its position against allowing multiple local sales taxes being assessed to the sale of marijuana, a move hailed Thursday morning by the Gasconade County Commission.

The Commission last month ordered a 3-percent countywide sales tax on marijuana be placed on the April 4 ballot. Owensville and Hermann also are seeking a 3-percent sales tax on pot sales, as well. Thus far, Hermann is the only location in the county with a marijuana dispensary.

After counties throughout Missouri sought to take advantage of a provision contained in Amendment 3 allow local governments to seek voter approval of a sales tax on marijuana, the Missouri Department of Revenue unexpectedly issued a decision against so-called “stacking” of local sales taxes on marijuana. That is, the department held that a county could not apply a 3-percent tax to sales made within a municipality, regardless of whether that municipality’s voters approved a sales tax or not.

In other words, only marijuana sales made within the unincorporated portions of a county could be subject to a county sales tax.

Given that all other countywide taxes are applied to retail sales made within municipalities, county officials argued there was no logic behind the Revenue Department’s position. County government officials quickly mobilized with Missouri Association of County officials and State Sen. Sandy Crawford meeting with DOR officials Feb. 6, after which the agency said it was going to propose an “open and transparent” rule-making process that would allow counties to comment and have a say in shaping the final rules regarding taxation of marijuana sales.

But shortly after that meeting, DOR changed its position and agreed to begin collecting a local countywide sales tax, if approved by county voters.

Because the legal sale of marijuana is so new, county officials here and elsewhere have no good estimate on the amount of revenue a sales tax will generate. However, early news reports from the state’s metro areas indicate strong sales of marijuana in the initial days of its now-legal status.

Meanwhile, local government agencies — counties, cities, school districts, hospital districts and so forth — are scrambling to update their employee handbooks regarding the use of marijuana by the employees. Some municipalities are considering possible ordinances aimed at regulating the use of marijuana in public areas.

Meanwhile, the County Commission Thursday could learn more about the potential cost of constructing an elevator at the courthouse. At last week’s session, Jeff Medows of Archer-Elgin engineering firm told county administrators that the staff engineer working on the elevator — and the proposed construction of three storage buildings on county property — will attend tomorrow’s session to provide the latest information he has regarding the cost of the project. Estimates for the installation of an elevator vary widely and the final expense will be key to whether the county moves forward or to what extent it can meet some of the pending requests for a share of the county’s American Rescue Plan Act (ARPA) money. The county has about $2.3 million in ARPA funds remaining from its $2.8-million allotment to be used to stimulate the local economy post-COVID.

There are about 16 requests for a total of $1.4 million awaiting action by the Commission. Those requests have been processed by Meramec Regional Planning Commission, which is contracting to administer ARPA money for Gasconade and the seven other counties in the Meramec Region.

“The elevator is kind of holding up” consideration of other uses of ARPA money,” said Presiding Commissioner Tim Schulte, R-Hermann. “We need to get going on this thing. There is a lot of money hanging out there and we’ve got to start making some decisions.”

In an effort to make some headway on the elevator project, which has been in the hands of Archer-Elgin for several months, Schulte and County Clerk Lesa Lietzow recently met with a representative of Cochran Engineering about the project.

There will be no Commission meeting next week in Owensville, the usual first-Thursday-of-the-month session, because administrators will be in Jefferson City for annual training. The next session will be at the courthouse on Thursday, March 9.

Commissioners finally received a Roadway Agreement from Sho-Me Technologies, which will be burying cable along Kramme Road to a cell tower site. The agreement makes clear a utility’s responsibility to make necessary repairs, if any, to county roadway right-of-way after working in the area. If the county has to make the repairs, it bills the utility for the cost.

Thanks to a change in state law, the County Clerk’s Office won’t have to spend as much time preparing the annual financial report. What previously has amounted to as much as 2.5 pages in a newspaper, the figures now required to be published will require only about one page, Lietzow said. The new financial statement will contain much less detail than previous versions, she said.

Owensville has pulled farther ahead of Hermann in terms of population in the past decade. The 2020 Census, which was delayed in large part by the coronavirus pandemic, is used to distribute the municipalities’ share of the countywide half-cent Law Enforcement Sales Tax. The county clerk noted that Owensville’s population now stands at 2,757 while Hermann’s population comes in at 2,185 — a drop that can be attributed to the conversion during the last decade of many single-family homes into guesthouses. That also helps explain the continued drop in enrollment in the past 10 to 12 years in the Gasconade County R-1 School District in Hermann.