Jefferson County Voters: Will You Pass a Local Tax on Marijuana Sales?

Jefferson County leaders say, ever since the start of Montana’s recreational marijuana sales at the beginning of 2022, they’ve been looking at the possibility of creating a local option tax on those sales in their jurisdiction. They say now was the time it made the most sense to ask county voters whether they want to take that step.

“You know, if it was a couple hundred bucks a month to start with, is that really worth the effort to put it on the ballot and bring in that little bit of tax base to offset it?” said Cory Kirsch, who chairs the Jefferson County Commission. “The growth of the marijuana sales nowadays is to where it’s substantial enough that it was worth the effort to have that reward.”

Earlier this year, the commission approved two measures to go on the ballot for the November election. One would put a 3% local tax on adult-use marijuana sales in Jefferson County, and the other would do the same for medical sales.

“If they want to tax one, they can tax one and not the other,” Kirsch said. “It gives them a good choice on what they can tax.”

Currently, half of Montana’s counties – 28 out of 56 – allow recreational marijuana sales. Jefferson County is one of only two, along with Glacier County, that haven’t yet put a local-option tax on those sales.

In Missoula, Ravalli, Flathead and Sanders Counties, the local-option tax applies to recreational sales but not medical sales. In the remaining counties, the tax is on all sales.

The Montana Department of Revenue’s official list of licensed dispensaries shows two in Jefferson County: one in Boulder and one in Whitehall. The department reports that, from July 2023 to June 2024, Jefferson County marijuana businesses made almost $648,000 in recreational sales and another $88,000 in medical sales. If there had been a 3% local-option tax in place, that would have generated about $19,400 on recreational sales and $2,600 on medical.

Local-option tax revenue is split, with 50% going to the county, 45% going to cities and towns in the county and 5% going to the state for administration costs.

Kirsch said, if Jefferson County voters approve the tax, they plan to use the money to address gaps in areas like mental health response. One idea is a program to connect sheriff’s deputies to additional support when they’re dealing with someone experiencing a mental health crisis.

“It helps the deputies work through those situations and hopefully talk those folks down so they don’t have to be hauled into to a bigger facility, and just get them leveled out,” said Kirsch. “That may be all they need, is just to talk to somebody that’s good at talking to them about that stuff. So we’re looking at that service now, and it does cost money – and if we can get some of this tax to offset that cost, that’s wonderful, and that’s what it’s for.”

Jefferson County isn’t the only place in Montana where residents will be voting on marijuana taxes this year. In Custer County, voters will decide whether to allow adult-use sales, and also whether to put a local-option tax on adult-use or medical sales.

According to the Montana Department of Revenue, there are two types of taxes placed on marijuana: state and local. Both occur only at the retail level on end-user purchases. State taxes are set by the Montana Legislature while local-option taxes are optionally enacted by counties.

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

• Local-option tax rates are set by the county up to a maximum of 3% on medical, adult-use, or both. These taxes are in addition to the state taxes.

• Businesses can pay their taxes through the Transaction Portal (TAP).

A locality is required to notify the department of the adoption of a local-option marijuana excise tax at least 90 days prior to its effective date. The department requires the locality to submit a copy of the ballot initiative placed before the electorate.

A legal posting in the Whitehall Ledger (this edition, page 16) NOTICE IS HEREBY GIVEN that in Jefferson County on November 5, 2024, a political subdivision election will be held in the County on the question of establishing a 3% local-option marijuana excise tax on the retail value of all medical marijuana, medical marijuana products, non-medical marijuana, and non-medical marijuana products sold within Jefferson County as follows:

1. SHALL JEFFERSON COUNTY IMPOSE A 3% LOCAL-OPTION MARIJUANA EXCISE TAX ON THE VALUE OF ALL MEDICAL MARIJUANA AND MEDICAL MARIJUANA PRODUCTS SOLD WITHIN JEFFERSON COUNTY?

2. SHALL JEFFERSON COUNTY IMPOSE A 3% LOCAL-OPTION MARIJUANA EXCISE TAX ON THE VALUE OF ALL NON-MEDICAL MARIJUANA AND NON- MEDICAL MARIJUANA PRODUCTS SOLD WITHIN JEFFERSON COUNTY?

In accordance with Montana law, the revenue of the local-option marijuana excise tax may be used for any activity, undertaking, or administrative service that the County is authorized by law to perform.

If passed the marijuana excise tax will be assessed on retail sales of medical

marijuana, medical marijuana products, non-medical marijuana, and non-medical marijuana products sold within Jefferson County effective April 1, 2025.