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Tax Foundation: Idaho Losing Out On $33.3 Million in Annual Marijuana Taxes

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By refusing to tax and regulate the sale of marijuana to adults, the non-profit Tax Foundation estimates that the state of Idaho loses out on about $33.3 million in taxes annually.

These data come via a report in the Motley Fool that breaks down the marijuana tax revenues that have been collected in the states with currently operational recreational marijuana programs.

The eight states in operation (Alaska, California, Colorado, Illinois, Massachusetts, Nevada, Oregon, and Washington) in 2020 alone netted nearly $2.3 billion in marijuana taxes, combined.

Since Colorado began the first legal marijuana sales in 2014, those eight states have raised almost $6.4 billion in marijuana taxes.

StateFirst yearTotal revenue (through 2020)
Alaska2017$55,184,464
California2018$2,067,681,715
Colorado2014$1,595,446,952
Illinois2020$52,783,471
Massachusetts2019$103,792,627
Nevada2018$274,125,703
Oregon2016$408,365,906
Washington2015$1,810,010,000
Total state marijuana tax revenue as presented by The Tax Foundation

“Using average excise tax figures and the number of marijuana-using residents in each state,” writes Motley Fool, “the Tax Foundation estimated the potential excise tax revenue with a market established for at least three years.”

There are roughly 185,000 adults using marijuana annually in the State of Idaho, according to the National Survey on Drug Use & Health. The Tax Foundation estimated that with average excise tax rates, Idaho would net $33,295,445 a year from legal marijuana sales.

Those estimates comport with real world data from Idaho’s bordertown pot shops—those shops in legal states within the shortest drive from Idaho.

In March 2021, the eight legal shops in Ontario, Oregon sold a record $10.4 million in marijuana products. It is well known that about 90 percent of their customers are coming from Idaho. At Oregon’s 20 percent tax rate, that amounts to $2 million a month in taxes, or $24 million a year from the Boise area alone. Add the shoppers in Northern Idaho who shop in Washington and those in Southeast Idaho who’ll soon shop in Nevada and Montana and it’s easy to conceive of a potential $33.3 million in annual Idaho marijuana taxes.

Instead, Idaho sends that tax money to Oregon and Washington and Idahoans bring that marijuana back to Idaho. Then Idaho spends taxpayer dollars arresting and prosecuting over 6,000 Idahoans every year that are caught with marijuana.

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