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imiubu

MI Patient Use %6 Tax

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imiubu

Anyone who has been paying attention, knew this was coming.  Trying to destroy the MMMA and drive ppl back to black market.

 

January 18, 2018, the Michigan Department of Treasury quietly issued a new policy directive stating that all transactions between a patient and the caregiver he or she is connected to through the MMMP registry, are subject to 6% Use Tax to be paid by the patient.

http://www.michigan.gov/documents/treasury/RAB_2018-2_Marihuana_611377_7.pdf

REVENUE ADMINISTRATIVE BULLETIN 2018

Approved:
January 18, 2018
MARIHUANA PROVISIONING CENTER
TAX AND SALES AND USE TAX
TREATMENT OF MARIHUANA
Pursuant to MCL 205.6a, a taxpayer may rely on a Revenue Administrative Bulletin issued by the Department of
Treasury after September 30, 2006, and shall not be penalized for that reliance until the bulletin is revoked in
writing. However, reliance by the taxpayer is limited to issues addressed in the bulletin for tax periods up to the
effective date of an amendment to the law upon which the bulletin is based or for tax periods up to the date of a final
order of a court of competent jurisdiction for which all rights of appeal have been exhausted or have expired that
overrules or modifies the law upon which the bulletin is based.
RAB 2018-2.
This Revenue Administrative Bulle
tin (RAB) explains the marihuana
1
provisioning center tax imposed by the Medical
Marihuana Facilities
Licensing Act (MMFLA)
and the sales and use tax treatment of marihuana
and marihuana-derived products sold pursuant
to the MMFLA and the Michigan Medical Marihuana Act (MMMA).
2
ISSUES
I.
What tax is imposed by the MMFLA?
II.
Is the sale of marihuana or marihuana-der
ived products taxable
under the General Sales
Tax Act (GSTA) and the Use Tax Act (UTA)?
III.
What are the tax return and remittance requirements and procedures under the MMFLA
and the GSTA?
CONCLUSIONS
I.
Provisioning Center Tax
The MMFLA imposes tax on the gross reta
il receipts of a
provisioning center
3
licensed
under the MMFLA at a rate of 3%.
4
The MMFLA does not limit the imposition of its tax
1
“Marihuana,” rather than “marijuana,” is
the spelling used by the MMFLA and the MMMA.
2
This RAB does not addr
ess any of the duties or responsibilitie
s the MMFLA or the MMMA places on the
Department of Licensing and Regulatory Affairs (LARA).
3
The MMFLA defines “provisioning cent
er” as “a licensee that is a commercia
l entity located in this state that
purchases marihuana from a grower or processor and sells, supplies, or provides marihuana to registered qualifying
patients, directly or through the patients' registered primary caregivers. Provisioning center includes any
commercial property where marihuana is sold at retail to
registered qualifying patients or registered primary
430 WEST ALLEGAN STREET
LANSING, MICHIGAN 48922
www.michigan.gov/treasury
(517) 373-3200
RAB 2018-2
Page 2
to marihuana or marihuana-derived products; th
erefore, all gross re
tail receipts of a
provisioning center
5
are subject to the tax. This incl
udes non-marihuana sales such as
marihuana paraphernalia, clothing, food, or
any other tangible personal property or
service; there are no exempti
ons for any service or property under the MMFLA. In other
words, all retail sales made by licensed provi
sioning centers are subject to the MMFLA’s
tax. Unlike sales tax, a seller subject to the MMFLA’s gross retail receipts tax may not
pass along the incidence of the tax to its cust
omer; the seller may,
however, consider the
tax in establishing its prices.
Example 1.
ABC, Inc. is a provisioning center. ABC sells rolling papers
in addition to marihuana products. ABC is liable for the 3% tax imposed
by the MMFLA for both rolling pape
r and marihuana product sales.
II.
Sales and Use Tax
6
The GSTA imposes a 6% sales tax on the gross proceeds of “all persons engaged in the
business of making sales at retail, by whic
h ownership of tangible personal property
7
is
transferred for consideration....”
8
The UTA imposes a 6% tax “f
or the privilege of using,
storing, or consuming tangible personal property
9
in this state....”
10
The GSTA and UTA
(Acts) only impose tax on sale
/use of tangible personal property not otherwise exempt
under the GSTA and UTA and services th
at are specifically subject to tax.
The retail sales of marihuana and marihuana-d
erived products by a provisioning center
are subject to sales tax.
11
The sale of any other ta
ngible personal property by a
provisioning center or other person that is not otherwise exempt from
sales or use tax is
also subject to tax.
A registered primary caregiver
12
under the MMMA “may receive compensation for costs
associated with assisting a registered qualifying patient
13
in the medical use of
caregivers. A noncommercial location used by a primary
caregiver to assist a qualifying patient connected to the
caregiver through the [LARA]'s marihua
na registration pr
ocess in accordance with the
MMMA is not a provisioning
center for purposes of this act.” MCL 333.27102(r).
4
MCL 333.27601(1).
5
For purposes of this RAB “provisioning center” only includes those provisioning centers that are licensed under
the MMFLA.
6
This RAB does not address various exemptions for the inputs used to produce usable marihuana.
7
All marihuana products are “tangible personal property” as defined by the GSTA and UTA. MCL 205.51a(q) and
MCL 205.92(k).
8
MCL 205.52(1).
9
See footnote 4,
infra.
10
MCL 205.93(1).
11
A Michigan sales tax license is required for any person making retail sales of tangible personal property. Mich
Admin Code R 205.1(1).
12
A “primary caregiver” is “a person who is at least 21 years old and who has agreed to assist with a patient's
medical use of marihuana and who has not been convicted of any felony within the past 10 years and has never been
convicted of a felony involving illegal drugs or a felony that is an assaultive crime as defined in section 9a of
chapter X of the code of criminal pr
ocedure, 1927 PA 175, MCL 770.9a.”
 
RAB 2018-2
Page 3
marihuana. Any such compensation does not constitute the sale of controlled
substances.”
14
Therefore, primary caregiver pr
ovision of marihuana and marihuana-
derived products in complianc
e with the MMMA is a non-taxa
ble service and not subject
to sales or use tax. However, a qualifying pa
tient that receives marihuana from a primary
caregiver is liable for use tax at a rate of
6% of the “purchase pr
ice” of the marihuana.
15
Use tax should be remitted and reported annually on the qualifying patient’s Michigan
Individual Income Tax Return (Form MI-1040).
Example 2.
Carrie is a caregiver under the MMMA. Carrie provides
marihuana in exchange for $100. Carrie
is not liable fo
r sales tax on the
$100 since sales by caregivers under the MMMA are a non-taxable
service. However, Paul is liable for use tax based on the purchase price of
the marihuana. Paul should report a
nd remit $6 in use tax for the use and
consumption of this property on lin
e 23 of his Michigan Individual
Income Tax Return (MI-1040).
The GSTA and UTA exempt the “sale of drug
s for human use that can only be legally
dispensed by prescription.”
16
However, this exemption does not apply to the sale, use,
storage, or consumption of marihuana or ma
rihuana-derived products because at the time
of the sale they are not dispen
sed pursuant to a prescription.
Rather, a qualifying patient
presents a registry identification card indica
ting that a physician has certified that the
patient has a debilitating medical condition. Th
erefore, this exemption is inapplicable to
the sale or transfer of marihuana for purposes of the MMFLA and the MMMA.
The GSTA and UTA also exempt the sa
le/use of “food or food ingredients,”
17
which are
defined as “substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion
or chewing by humans and are consumed for
their taste or nutritional value. Food a
nd food ingredients do not include alcoholic
beverages and tobacco.”
18
Marihuana-infused products
19
are not eligible for this
exemption because they are consumed for their
medicinal value rather than for their taste
or nutrition.
The sales and use tax bases include taxes imposed on the seller other than those imposed
by the GSTA and UTA.
20
Therefore, the 3% tax imposed
by the MMFLA is also subject
13
A “qualifying patient” is “a person who has been diagnosed by a physician as having a debilitating medical
condition.” MCL 333.26423(l).
14
MCL 333.26424(f).
15
MCL 205.93(1); MCL 205.92(d).
16
MCL 205.54g(1)(a) and MCL 205.94d(1)(a).
17
Id.
18
MCL 205.54g(3) and MCL 205.94d(3).
19
"Marihuana-infused product" means “a topical formulation, tincture, beverage, edible substance, or similar
product containing any usable marihuana that is intended for human consumption in a manner other than smoke
inhalation. Marihuana-infused product shall not be considered a food for purposes of the food law, 2000 PA 92,
MCL 289.1101 to 289.8111.” MCL 333.26423(f).
20
MCL 205.51(1)(d)(ii) and MCL 205.92(f)(ii).
 
RAB 2018-2
Page 4
to sales and use tax when a provisioning cen
ter or other person se
lls property that is
subject to sales and use tax.
Example 3.
ABC, Inc. is a provisioning cen
ter. ABC sells marihuana to
Customer for a sales price of $100.
ABC is liable for $3 in tax under the
MMFLA. ABC also is liable for sales tax based on 6% of $103, which
amounts to a sales tax liability of
$6.18. ABC must report and remit $3 on
its return under the MMFLA a
nd $6.18 on its sales tax return.
III.
Return and Remittance Requirements and Procedures
The MMFLA requires provisioning centers to remit the provisioning center tax for a
calendar quarter to the Departme
nt of Treasury (Treasury) by
30 days after the end of that
calendar quarter, accompanied by a form prescribed by Treasury.
21
The return must
disclose the provisioning center’
s gross quarterly reta
il receipts and th
e amount of tax due
under the MMFLA. The return must be su
bmitted electronically through Michigan
Treasury Online (MTO).
Provisioning centers must file sales tax re
turns based on the frequency directed by
Treasury (i.e., monthly, quarterl
y, or annually). Filing of re
turns for sales, use, and
withholding taxes must be
done electronically
through MTO; sales, use, and/or
withholding tax payments may also be
remitted electronically through MTO.
Alternatively, payment of any Michigan taxe
s, including the provisioning center tax and
sales, use and withholding taxes, may be ma
de by cash or check at any Treasury field
office. In order to process in-person paymen
ts of tax by check or cash, the taxpayer must
provide either 1) a Medical Marihuana Tax Pa
yment Voucher, Form 5098, and/or a Sales,
Use and Withholding Payment Voucher, Form
5094, or 2) its tax identification number.
Treasury field offices and MTO will not accept payments that are due to any other
agencies, such as LARA

 

Edited by imiubu

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Captainmorgan

Now if they kick a caregivers door down and can't find any violations they'll just try to get them on tax evasion.

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imiubu
31 minutes ago, Captainmorgan said:

Now if they kick a caregivers door down and can't find any violations they'll just try to get them on tax evasion.

A registered primary caregiver
12
under the MMMA “may receive compensation for costs associated with assisting a registered qualifying patient
13
in the medical use of marihuana. Any such compensation does not constitute the sale of controlled substances.”
14
Therefore, primary caregiver provision of marihuana and marihuana-derived products in compliance with the MMMA is a non-taxable service and not subject to sales or use tax. However, a qualifying patient that receives marihuana from a primary caregiver is liable for use tax at a rate of 6% of the “purchase price” of the marihuana.

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imiubu
3 minutes ago, Captainmorgan said:

oops

Just cuz that's what it states, doesn't make you wrong though.  Leo has a way of ignoring laws so they can take our assets.

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imiubu
4 hours ago, imiubu said:
ABC, Inc. is a provisioning center. ABC sells rolling papers
in addition to marihuana products. ABC is liable for the 3% tax imposed
by the MMFLA for both rolling pape
r and marihuana product sales.

So... provisioning centers have a %6 sales tax and an additional 3% ? 

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imiubu

How the hell do they tax something that is federally illegal?  Man, it's all so effing convoluted how they squeeze the little guy.  And these so called provisioning centers still can't legally do any banking?  So, are taxes done by the old honor system O.o

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imiubu

It's unfortunate that I am no longer surprised by their blatant disrespect for laws and human rights. 

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thebigyeti
On 1/26/2018 at 9:06 PM, imiubu said:

How the hell do they tax something that is federally illegal?

Hell, the Feds expect you to pay taxes on any money you make, legal or illegal.

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imiubu
1 hour ago, thebigyeti said:

Hell, the Feds expect you to pay taxes on any money you make, legal or illegal.

True.  Fat chance they can collect on 'illegal' activities... I mean...  I won't report that type of income :o lol

This is a MI USER tax though... levied upon MI MEDICAL marihuana PATIENTS.  Mega fugged up imho.

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thebigyeti
3 hours ago, imiubu said:

True.  Fat chance they can collect on 'illegal' activities... I mean...  I won't report that type of income :o lol

This is a MI USER tax though... levied upon MI MEDICAL marihuana PATIENTS.  Mega fugged up imho.

Example Al Capone.

I agree, the Michigan tax is fucked up. It is setting up all patients, that don't grow their own, for trouble with the tax man.

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shaggyballs

Looks like we have gone the way of the sin tax.>:(

Taxing medicine is just wrong all all fronts.Image result for sad

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imiubu

If there are patients foolish enough to actually file said use tax I hope like hell they speak with their caregiver prior to make sure they're both on the same page as to amounts.  I am pretty certain "they" will be coming up with an income tax plan for caregivers soon. 

 

Edit to add:

I spoke with a friend last night who told me that LARA is holding her patient card until she pays off her overdue MI State Income Taxes.  WTF!!!  How is that even possible or legal???

Edited by imiubu

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thebigyeti
Just now, imiubu said:

I am pretty certain "they" will be coming up with an income tax plan for caregivers soon. 

No doubt.

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jpdnkstr
On 2/8/2018 at 6:48 PM, imiubu said:

If there are patients foolish enough to actually file said use tax I hope like hell they speak with their caregiver prior to make sure they're both on the same page as to amounts.  I am pretty certain "they" will be coming up with an income tax plan for caregivers soon. 

 

Edit to add:

I spoke with a friend last night who told me that LARA is holding her patient card until she pays off her overdue MI State Income Taxes.  WTF!!!  How is that even possible or legal???

Any update on this?

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imiubu
47 minutes ago, jpdnkstr said:

Any update on this?

I'll noodle around to see what I can find.   I am member of a ballot question committee that meets on Saturday.  If I am unable to locate anything via the nets... someone there will most likely be up to date on this issue.  A couple folks in the group have their finger on the pulse much more so than I.

 

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shaggyballs
On 2/8/2018 at 6:48 PM, imiubu said:

I spoke with a friend last night who told me that LARA is holding her patient card until she pays off her overdue MI State Income Taxes.  WTF!!!  How is that even possible or legal???

Holding your card hostage untill you pay your taxes ...WTF is that.

Withholding medicine for unpaid taxes is without a doubt a criminal act.

Fuck the Government!

 

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