A bill to place a tax on recreational marijuana was introduced by Rep. Craig Headland, R-Montpelier, and will have its first committee hearing this week.
HB 1501 would place a 15% tax on recreational marijuana and set procedures for the state to license retail facilities and collect the tax if recreational marijuana use is legalized in North Dakota.
HB 1420, introduced by Rep. Jason Docktor, R-Bismarck, would legalize the possession of up to one ounce of marijuana.
Headland said HB 1420 originally also included the tax on marijuana but it was decided to make tax and administration of licensing a separate bill that would come out of the House Finance and Taxation Committee that Headland chairs.
"This bill would create the tax by the tax committee," he said. "We'd be much better off than neighboring states."
In some states, the taxation aspect of legalizing marijuana was created by the same initiated measure that legalized recreational marijuana.
Headland said the bill sets an excise tax of 15% of the gross receipts of retail sales of marijuana and marijuana products and is comparable to taxes in other states. The bill also sets standards for licensing, procedures for reporting sales and penalties for not remitting the taxes as set by law.
The bill prohibits local governments from imposing their own taxes on legal marijuana sales but directs the state to distribute 3% of the tax to cities and counties where the retail marijuana dispensaries operate.
This act is contingent on the passage of a bill authorizing the retail sale of marijuana and marijuana products. If that occurs, this bill becomes effective for taxable events occurring after June 30.
The bill could also be the taxing and administrative portion of HB 1420, if it were to pass, or could serve the same function with some amendments with an initiated measure currently gathering signatures.
The bill does not include any estimate of the revenue the tax could generate in North Dakota.
Headland said he does not support marijuana legalization but sees it as a possibility in North Dakota's future.
"We are telling our youth and everybody else that it is fine to bring this forward," he said. "I have a problem with it."
Hearings are scheduled for both bills Wednesday in an effort to make it convenient for people with an interest in legalized marijuana to testify at both, Headland said.
A hearing on HB 1420 is scheduled for 9 a.m. before the House Human Services Committee.
HB 1501 will be heard at 10:30 a.m. before the House Finance and Taxation Committee.