CHARLESTON — Part of the West Virginia State Senate’s plan to help offset the revenue loss from eliminating the personal property tax is to use taxes raised through a sales tax on marijuana, which could be legalized for recreational purposes if the federal government decriminalizes it.
Virginia became the 16th state to legalize if for recreational use this year. The Democrat-controlled Virginia General Assembly voted Wednesday to accept Gov. Ralph Northam’s proposed changes to a marijuana legalization bill that will allow limited possession and cultivation of the drug starting in July. The governor’s amendments would allow adults 21 and up to legally possess up to one ounce (28.3 grams) of cannabis without the intent to distribute beginning July 1. They would also allow the home cultivation of up to four plants per household beginning July 1.
The Senate proposal came following Gov. Jim Justice’s effort to gradually end the personal income tax, but his plan differs with the Senate’s plan on which taxes to raise to offset the more than $1 billion annual revenue loss and by how much.
Various tax hikes are included in both plans, but the Senate’s version is the only one that includes a possible marijuana sales tax, contingent on it being decriminalized on a national level.
States that have legalized the recreational use have clamored for the national law to change to avoid any conflicts between federal and state laws.
As it stands now, federal law classifies cannabis as a schedule 1 drug, placing it in the same category as heroin.
West Virginia has already legalized it for medical use.
U.S. Senate Majority Leader Chuck Schumer recently announced the Senate Democrats will push legislation this year to end the federal prohibition on marijuana.
The House of Representatives passed the Marijuana O p p o r t u n i t y , Reinvestment and Expungement (MORE) Act last year. Under the act, cannabis would be federally descheduled and those with prior convictions would have their records expunged.
Pres. Joe Biden has expressed support for decriminalizing marijuana and expunging prior criminal records for marijuana possession.
Sen. Chandler Swope, R-6th District, said whether it’s legal in West Virginia for recreational use is dependent on what the federal government does.
“The bill’s references to recreational marijuana are based on national news that legalization at the national level is a major agenda of the Biden Administration,” Swope said. “All the current bill does is codify that West Virginia will make recreational marijuana legal if mandated by the federal government. This bill does not change current law unless and until required by the federal government.”
Del. Marty Gearheart, R-Mercer County, said the state will follow the federal government’s lead on legalization, but taxing it as a revenue source would be a separate issue. “I will consider revenue from a source when the source is available to tax,” he said. “If the feds reschedule marijuana, it could be legal here.”
But Del. Joe Ellington, R-Mercer County, who is also a physician, is against legalization for recreational use or taxing it.
“If the feds change scheduling of marijuana from schedule 1 then the state may take that up,” he said. “I am in favor of medical indications but not recreational. We already have a significant drug problem in this state even with legal products like tobacco and alcohol.”
Ellington said not everyone who uses marijuana will go on to other drugs.
“However, in my experience as a health professional, individuals with substance abuse issues, excluding those prescribed narcotics initially, started with marijuana use and went on to other substances,” he said. “For the state to look at this as a cash cow I’m not in favor of. I would predict that if this was to occur, then our unintended costs would far outweigh any tax revenues we would realize, not to mention the social costs to our communities.”
Colorado legalized marijuana for recreational use in 2014.
According to the Colorado Department of Revenue, the state collected $355 million in sales tax on the drug from January to November in 2020.
Other states, including New York and New Mexico, are also expected to legalize it soon.
Justice will meet with Senate and House leaders on Monday to try to iron out differences in their respective plans. The House version very gradually phases in the elimination of the personal income tax as revenues grow, not using tax hikes as a way to make up the difference.
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