Governor Murphy’s administration is considering a phased-in tax rate for recreational marijuana following talks with Senator Nicholas Scutari, D-22nd District, according to state treasury spokesperson Jennifer Sciortino.
In his budget proposal address in March, the governor announced that the state stands to realize upwards of $80 million in annual revenues from taxing legal marijuana sales in 2019: $60 million from recreational marijuana and $20 million from the expansion of the state’s medical marijuana program. However, in its recently released tax revenue projections for 2019, the state treasury lowered the anticipated tax revenue from marijuana by $11 million, bringing the overall projected tax revenue down from $80 million to $69 million. For 2019, the treasury expects to garner $49 million – rather than $60 million – from taxing recreational marijuana, while the projected tax revenue from the newly expanded medical marijuana program remains at $20 million. The administration’s contemplation of a phased-in tax plan might explain the downward revision of the projected marijuana-related taxes in 2019.
Senator Scutari’s proposed recreational marijuana legislation – Senate Bill 830 – envisions a phased-in tax rate over five years: 7% in the first year, 10% in the second year, 15% in the third, 20% in the fourth and 25% in the fifth and following years.