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Marijuana Tax Revenue Surpasses Alcohol in Massachusetts
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Meg McIntyre
With the fiscal year halfway over, state revenue from the marijuana excise tax is outpacing revenue from alcohol. As of December, the state had collected about $74.2 million in marijuana excise tax so far for fiscal year 2022, according to the Massachusetts Department of Revenue. That month, tax revenue from alcohol reached $51.3 million fiscal year-to-date, the department’s data shows.
Fiscal year 2021 was the first year that weed overtook booze, with the state collecting $92.7 million from alcohol and $112.4 million from the marijuana excise tax. In fiscal year 2020, marijuana had lagged behind at $51.7 million in revenue, compared to $87.6 million from alcohol. The taxes on cannabis and alcohol are structured and applied differently. The state levies a 10.25 percent excise tax on marijuana purchases by the consumer in addition to the local option tax of up to 3 percent and the state’s 6.25 percent sales tax. The excise on alcohol is based on volume and is paid by the producer.
The new legal market has also been a boon for cities and towns. Revenue from the local option tax on marijuana had reached nearly $20.6 million for FY22 as of December, as compared to about $13.3 million in December of FY21. Local revenue has been growing steadily over the last three years, save for a brief downturn caused by pandemic lockdowns. Between December 2018 and May 2019, adult-use marijuana brought in nearly $2.9 million in local tax revenue, according to the Massachusetts Department of Revenue, and the following fiscal year, which ended in June 2020, cannabis drew roughly $14.4 million for cities and towns. In FY21, the local option tax brought in more than double that at $31.3 million.
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