Flathead County to Discuss Local Marijuana Tax


On Wednesday, Flathead County commissioners will discuss the option of a local marijuana sales tax.

House Bill 701 authorizes an excise tax on marijuana via a ballot initiative in Montana counties where a majority of voters approved legalization. Flathead voters approved recreational sales by a 7-point margin in the 2020 election.

According to the Montana Department of Revenue, local tax applies to the retail value of all marijuana and marijuana products sold at an adult dispensary or medical marijuana dispensary in a county. The rate is set by petition or election resolution and cannot exceed 3%.

Flathead County Commissioners will hold a public comment session at 9 a.m. on July 27 at the courthouse at 800 S. Main St in Kalispell.

State marijuana taxes are set at 4% for medical marijuana and 20% for sales for adult use.

By June, the state’s recreational tax had generated more than $15 million in revenue, with another $3 million coming from medical marijuana sales.

Sixteen counties in Montana have already created a local marijuana tax, including Lake, Missoula and Ravalli counties in western Montana.

In Lake County, the county takes 50% of the revenue, with the rest going to Polson, Ronan, and St. Ignatius, and 5% to the state as an administration fee. Lake County estimates that its local governments could collectively receive $180,000 per year.

Similarly in Missoula, the county keeps half of the revenue and passes 45% to the county’s municipalities.

Counties can decide how to use local tax revenue.

In Park County, for example, revenues go to the sheriff’s office and general fund, while Missoula County has considered using the funds to reduce property taxes.

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