Missouri Companies File Lawsuit Over City and County Marijuana Tax ‘Stacking

A lawyer from Kansas City who operates a marijuana business from seed to sale has filed a lawsuit that could establish a new standard for the collection of local sales taxes on cannabis products.

Chris McHugh wears many hats. He is not only an attorney with Joseph Hollander & Craft LLC in Kansas City, but also the president and CEO of a cannabis operation called Vertical Enterprise, based in St. Joseph.

In September, McHugh took legal action against the practice of “stacking” where both St. Joseph and Buchanan County imposed a 3% sales tax on marijuana sales and attempted to collect them from dispensaries located within the city limits. The enforcement of these sales taxes in Buchanan County began on September 1st.

The problem is not limited to Buchanan County alone. Another lawsuit with a similar nature has been filed in St. Louis County, and it seems like the disagreement will soon reach the Kansas City region.

The recent approval of a 3% county sales tax on marijuana by Jackson County voters on April 4 has brought about a significant change in the local cannabis industry. Interestingly, several cities within the county have already been charging a similar 3% sales tax on marijuana.

According to McHugh, the act of stacking local sales taxes on top of the already allowed 3% for adult use marijuana in Missouri is unconstitutional. This is because it results in a total of 6% in local sales taxes, which when added to the 6% charged by the state, exceeds the limit set by the amendment that legalized marijuana for adult use in the state.

For more information, head over to the Kansas City Business Journal and continue reading about the topic at hand. The provided link will take you directly to the article.

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MBS Staff
MBS Staff
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