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Montana counties receive first local-option marijuana tax revenue

Posted at 6:03 PM, Jul 08, 2022
and last updated 2022-07-08 20:38:37-04

HELENA - Montana is six months into the launch of recreational marijuana sales, and now, counties are receiving the first payments of their local-option marijuana taxes.

House Bill 701, which established the current framework for the state’s marijuana system, gave counties the chance to ask voters for up to 3% taxes on adult-use and medical marijuana sales. On June 15, the Montana Department of Revenue started distributing the first of those local tax revenues.

Local-option taxes have started slowly: Only four counties have implemented them so far, and only three of those — Yellowstone, Missoula and Park — had them in place early enough to receive payments for the first quarter of the year. However, that number is soon going to grow significantly.

Marijuana taxes are due to the Department of Revenue 15 days after the end of each three-month quarter – April 15 for the first quarter of 2022. The state then transfers the local tax revenue to counties 60 days later.

The county keeps half of the money and passes 45% on to any incorporated municipalities in their jurisdiction. The state keeps the remaining 5% for administration costs.

Yellowstone County is set to receive $246,656 for first-quarter sales of adult-use and medical marijuana. They will share that funding with three municipalities: Billings, Laurel and Broadview.

Yellowstone County Commissioner Denis Pitman told MTN they haven’t budgeted their share of the money yet, and it will remain in a special account for now. He expects the county will take a closer look at how to use the revenue next year, to give them time to figure out efficient uses.

“There’s no point to just start throwing $10,000 here, $10,000 there,” he said.

Missoula County only approved a local tax on recreational sales, not on medical sales. The county received $109,731 in first-quarter taxes. Missoula is the only incorporated municipality that will share in that revenue.

Allison Franz, a spokesperson for Missoula County, said leaders haven’t determined where to direct the tax money yet. They are looking at options during this year’s budgeting cycle, which is going on currently.

Park County is receiving $22,612 for its first-quarter adult-use and medical marijuana taxes. It will also transfer funding to the municipalities of Livingston and Clyde Park.

Steve Caldwell, a Park County commissioner, told MTN half of their share of the revenue will go to the county sheriff’s office, while the rest will go to the general fund.

The fourth county with a local-option tax in place — Dawson County — has not received any tax payments yet. They began collecting the tax on April 2, after the start of the second quarter.

In ten additional counties, voters approved taxing adult-use and medical marijuana sales in the June elections. Those taxes cannot take effect for at least 90 days after the approval. The counties will likely get their first payments in late 2022 or early 2023.

Lewis and Clark County, the most populous of those ten counties, is set to implement the taxes on Oct. 1. The others include Big Horn, Blaine, Carbon, Lake, Powell, Richland, Roosevelt, Rosebud and Silver Bow.

Ravalli County voters passed a tax on recreational sales in June, but narrowly rejected one on medical marijuana.

In Gallatin County, voters approved a local-option tax on both adult-use and medical sales. However, the result was nullified due to an administrative error, and the issue will be on the ballot again in November.