Voters to decide fate of 3% marijuana sales tax in cities and counties April 4
There’s one ballot item that all St. Louis County voters get a chance to decide on April 4: whether to impose a 3% sales tax on recreational marijuana purchases.
Backers of what’s known as Proposition M see the tax as an easy way to get more revenue when St. Louis County is going through tough financial times. It comes as 35 St. Louis County municipalities are also asking their residents to approve a 3% tax on recreational cannabis.
Franklin, Marion and St. Charles counties also have marijuana taxes on the April 4 ballot. There are taxes up for a vote in four Jefferson County municipalities, five in St. Charles County, five in Franklin County and three in Marion County.
“We have had an ongoing gap between revenues and expenditures in St. Louis County for about 15 years,” said County Executive Sam Page, adding that the county's expenses are continuing to go up. “And at some point we need new revenue to keep up with the expectations of the great services that St. Louis County provides.”
Councilman Mark Harder, R-Ballwin, said he was wary of the constitutional amendment that legalized marijuana. But he said that even people who supported that measure likely knew that they were going to have to pay taxes when buying marijuana.
He also said that Proposition M is easier for St. Louis County residents to potentially support, because only people who use marijuana would pay the tax.
“If you don't smoke it, you don't pay it,” Harder said. “No one wants to pay a higher tax on anything. But in order to be able to partake legally, people will do that. And it's not that much higher of tax than anything else we're paying in many, many jurisdictions.”
Councilman Dennis Hancock, R-Fenton, is less enthusiastic about the proposal. He said it may not generate as much tax revenue as policymakers hope, especially if people start growing marijuana instead of purchasing it at dispensaries.
“I don't think it's going to be this huge tax payday for governments that a lot of people seem to think,” Hancock said.
The scope of the tax
John Payne, who managed the campaign to legalize marijuana in Missouri, said the plain language of the amendment does not allow what’s known as “stacking” – a term used for collecting a 3% municipal tax and 3% county tax on marijuana.
“The way that local government is defined in the amendment is it's an either/or proposition,” Payne said.
Page said that Proposition M would tax marijuana at all county dispensaries, not just ones in unincorporated areas.
“All counties in Missouri are interested in this,” Page said. “And it's the position of the Missouri Association of Counties, St. Louis County, St. Charles County and the Missouri Department of Revenue that this tax will be collected in unincorporated areas and in municipalities in counties.”
The Missouri Department of Revenue initially said the 2022 constitutional amendment didn’t allow for stacking. The agency ultimately sent a letter stating it “rescinded that guidance after engaging in public and private stakeholder feedback.”
Department of Revenue spokeswoman Anne Marie Moy said her agency advised political subdivisions in late February that the language used in the recreational marijuana amendment of the Missouri Constitution “was ambiguous, and there are two interpretations of the ‘stacking tax’ issue.”
“The Department will not supersede the decisions of the people on sales tax for adult marijuana, nor the meaning of the constitutional verbiage, when there is not a definitive answer,” Moy said. “Municipalities and counties may put the additional tax on the ballot, but Missourians will ultimately decide what they support.”
Payne expects the issue will be decided in court.
“Voters obviously want to have a good level of taxation on marijuana products and marijuana flower,” Payne said. “But at the same time, if you tax it too highly, then all you're doing is feeding the illicit market. And also you're creating kind of inequitable situations between different dispensaries.”
Whatever a court decides could drastically affect how much money a county takes in from the tax. If St. Louis County can collect marijuana taxes from dispensaries in municipalities, the estimated revenues are expected to be around $3 million. That total will drop precipitously if the county tax only affects dispensaries in unincorporated areas.
Information campaign panned
Hancock was one of two council members who voted against the county allocating $300,000 for an information campaign about the tax.
He said the allocation was a waste of money — especially when voters can likely figure out for themselves whether Proposition M is a good or bad idea.
“The ballot language is pretty straightforward,” Hancock said. “You don't have to go very far in the ‘here's how it's gonna benefit the county' direction to stop being an ‘educational campaign’ and start being a ‘vote for this campaign.’”
Councilwoman Rita Days, D-Bel Nor, also voted against spending money for the informational campaign.
“I have been talking about the tax in the meetings that I've attended,” Days said. “And I think we could have educated the people along those lines without necessarily utilizing the county's money to do that.”
Harder said the money for the information campaign will pay for neutral messaging about the tax proposal. He noted that school districts and municipalities often allocate money whenever there’s a ballot item up for a vote.
“They inform the people what it's going to do and then they can't say vote yes or vote no,” Harder said.
Page added that “when a tax question is before the voters, I think it's important to let the voters know what it's about and what the tax is for.”
“Our education campaign will be explaining to folks that new revenue would be spent on the things that we spend the most money on, which is police, public safety, roads and parks,” Page said.