High THC cannabis excise tax

AN ACT Relating to increasing the cannabis excise tax on high THC 1
cannabis products; and amending RCW 69.50.535. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
Sec. 1. RCW 69.50.535 and 2024 c 79 s 1 are each amended to read 4
as follows: 5
(1)(a) There is levied and collected a cannabis excise tax equal 6
to ((thirty-seven)) 37 percent of the selling price on each retail 7
sale in this state of ((cannabis concentrates, useable cannabis, and 8
cannabis-infused products. This tax)):9
(i) Cannabis concentrates with a THC concentration of no greater 10
than 35 percent;11
(ii) Useable cannabis with a THC concentration no greater than 35 12
percent; and13
(iii) Cannabis-infused products.14
(b) There is levied and collected a cannabis excise tax equal to 15
50 percent of the selling price on each retail sale in this state of:16
(i) Cannabis concentrates with a THC concentration greater than 17
35 percent; and18
(ii) Useable cannabis with a THC concentration greater than 35 19
percent.20
H-2183.1
HOUSE BILL 2075
State of Washington 69th Legislature 2025 Regular Session
By Representatives Davis and Ryu
Read first time 04/09/25. Referred to Committee on Finance.
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(c) The tax levied in this section is separate and in addition to 1
general state and local sales and use taxes that apply to retail 2
sales of tangible personal property, and is not part of the total 3
retail price to which general state and local sales and use taxes 4
apply. The tax must be separately itemized from the state and local 5
retail sales tax on the sales receipt provided to the buyer.6
(((b))) (d) The tax levied in this section must be reflected in 7
the price list or quoted shelf price in the licensed cannabis retail 8
store and in any advertising that includes prices for all useable 9
cannabis, cannabis concentrates, or cannabis-infused products.10
(2)(a) Until June 30, 2029, the tax levied by subsection (1) of 11
this section does not apply to sales by a cannabis retailer with a 12
medical cannabis endorsement to qualifying patients or designated 13
providers who have been issued a recognition card, of cannabis 14
concentrates, useable cannabis, or cannabis-infused products, 15
identified by the department as a compliant cannabis product in 16
chapter 246-70 WAC and tested to the standards in WAC 246-70-040.17
(b) Each seller making exempt sales under this subsection (2) 18
must maintain information establishing eligibility for the exemption 19
in the form and manner required by the board. 20
(c) The board must provide a separate tax reporting line on the 21
excise tax form for exemption amounts claimed under this subsection 22
(2). 23
(3) All revenues collected from the cannabis excise tax imposed 24
under this section must be deposited each day in the dedicated 25
cannabis account. 26
(4) The tax imposed in this section must be paid by the buyer to 27
the seller. Each seller must collect from the buyer the full amount 28
of the tax payable on each taxable sale. The tax collected as 29
required by this section is deemed to be held in trust by the seller 30
until paid to the board. If any seller fails to collect the tax 31
imposed in this section or, having collected the tax, fails to pay it 32
as prescribed by the board, whether such failure is the result of the 33
seller's own acts or the result of acts or conditions beyond the 34
seller's control, the seller is, nevertheless, personally liable to 35
the state for the amount of the tax. 36
(5) The definitions in this subsection apply throughout this 37
section unless the context clearly requires otherwise.38
(a) "Retail sale" has the same meaning as in RCW 82.08.010.39
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(b) "Selling price" has the same meaning as in RCW 82.08.010, 1
except that when product is sold under circumstances where the total 2
amount of consideration paid for the product is not indicative of its 3
true value, "selling price" means the true value of the product sold.4
(c) "Product" means cannabis, cannabis concentrates, useable 5
cannabis, and cannabis-infused products. 6
(d) "True value" means market value based on sales at comparable 7
locations in this state of the same or similar product of like 8
quality and character sold under comparable conditions of sale to 9
comparable purchasers. However, in the absence of such sales of the 10
same or similar product, true value means the value of the product 11
sold as determined by all of the seller's direct and indirect costs 12
attributable to the product. 13
(6)(((a))) The board must regularly review the tax level s 14
established under this section and make recommendations, in 15
consultation with the department of revenue, to the legislature as 16
appropriate regarding adjustments that would further the goal of 17
discouraging use while undercutting illegal market prices.18
(((b) The board must report, in compliance with RCW 43.01.036, to 19
the appropriate committees of the legislature every two years. The 20
report at a minimum must include the following:21
(i) The specific recommendations required under (a) of this 22
subsection;23
(ii) A comparison of gross sales and tax collections prior to and 24
after any cannabis tax change;25
(iii) The increase or decrease in the volume of legal cannabis 26
sold prior to and after any cannabis tax change;27
(iv) Increases or decreases in the number of licensed cannabis 28
producers, processors, and retailers;29
(v) The number of illegal and noncompliant cannabis outlets the 30
board requires to be closed;31
(vi) Gross cannabis sales and tax collections in Oregon; and32
(vii) The total amount of reported sales and use taxes exempted 33
for qualifying patients. The department of revenue must provide the 34
data of exempt amounts to the board.35
(c) The board is not required to report to the legislature as 36
required in (b) of this subsection after January 1, 2025.))37
(7) The legislature does not intend and does not authorize any 38
person or entity to engage in activities or to conspire to engage in 39
activities that would constitute per se violations of state and 40
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federal antitrust laws including, but not limited to, agreements 1
among retailers as to the selling price of any goods sold.2
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