Seattle marijuana growers hit with additional tax

SEATTLE -- Marijuana farmers are not the same as your average fruit and vegetable farmer, at least according to the Seattle City Council.

Like many Washington cities, Seattle is wrestling with how to regulate a new legal marijuana industry.

In general, Seattle businesses must pay a business and occupation tax. Farmers selling their own crops are exempt from the tax, but the council decided on Monday that marijuana farmers will not get the exemption.

The full council, with support from City Attorney Pete Holmes, rejected the idea of giving pot growers the tax break.

"It's when the sale takes place in the city limits that the B and O tax applies, it's not where the marijuana is grown," Holmes said.

The decision means marijuana farmers will pay an additional 1/5 of 1 percent tax on top of the 25 percent tax imposed by the state.

The decision didn't sit well with pot farmers who feel the state tax is more than enough.

"There are already enough additional taxes on these growers, so I think we should hold off," said Todd Arkley, a CPA for a legal grower.

Councilmember Nick Licata said he voted to impose the tax because the idea of legalizing marijuana was to raise money.

"The expectation was with the legalization of marijuana we were going to raise revenue from it, and basically that was a ground rule and everybody signed off on it," he said.

But in the bigger picture, marijuana advocates say it's just another sign that local governments want to treat marijuana differently.

The state has given cities and counties the right to regulate recreational marijuana as they see fit, even allowing them to put a moratorium on sales.

Beginning Monday, medical marijuana dispensaries can legally register with the state of Oregon, which has more liberal selling laws than Washington.

"I'll probably move to Oregon because they just legalized dispensaries down there," said medical marijuana grower Joe Parker. "We can't wait for the chance to show the world how a businesses like this can really be a model citizen."