Sales taxes will apply to Louisiana medical marijuana; legislators worried extra cost could be burden to patients
Prescription drugs in Louisiana are exempted from state sales tax. That won’t be the case for medical marijuana, a drug that will be “recommended” by doctors rather than “prescribed.”
With that nuance of words, the state’s full sales tax — currently at 5 percent — will be tacked on to purchases of the drug when it becomes available, likely later this year, according to the state Department of Revenue, settling what had been an open question in the industry.
The 5th penny of sales tax is slated to roll off the books at the end of this month, so marijuana could be taxed at a lower rate when it hits the market, depending on whether the Legislature passes any changes to the sales tax.
Local sales taxes also will apply to sales of the drug in most places, under current laws.
The Louisiana Department of Revenue confirmed in a statement this week that the prescription drug exemption on the state sales tax does not apply to medical marijuana sales. The sales tax applies at the point of sale to consumers, who will buy the drug from nine initial licensed marijuana pharmacies in regions throughout the state.
State Sen. Fred Mills, who authored the legislation that enacted Louisiana’s medical marijuana program, was under the impression the drug would not be subject to the full state sales tax.
“In my mind it’s not taxable,” Mills said. “If the Department of Revenue sees it differently, … I guess it kind of leaves it wide open for some more discussion.”
Mills, who learned from a reporter that the state sales tax will apply to marijuana, said he initially drafted his bill several years ago to specifically make sure it wouldn’t be