MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Ways and Means
By: Representative Porter
AN ACT TO AMEND SECTION 27-72-1, MISSISSIPPI CODE OF 1972, TO AUTHORIZE MUNICIPALITIES TO LEVY AN EXCISE TAX ON CANNABIS CULTIVATION FACILITIES AT THE RATE OF THREE PERCENT OF THE SALES PRICE OF CANNABIS FLOWER OR CANNABIS TRIM; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-72-1, Mississippi Code of 1972, is amended as follows:
27-72-1. (1) (a) For purposes of this section:
(i) "Cannabis cultivation facility," "dispensary," "medical cannabis" and "medical cannabis establishments" shall be defined as provided in Section 41-137-3.
(ii) "Cannabis flower" means the flower, including abnormal and immature flowers, of a plant of the genus cannabis that has been harvested, dried and cured, and prior to any processing whereby the flower material is transformed into a cannabis product. "Cannabis flower" does not include the leaves or stem of such plant or hemp.
(iii) "Cannabis trim" means all parts, including abnormal or immature parts, of a plant of the genus cannabis, other than cannabis flower, that have been harvested, dried and cured, and prior to any processing whereby the plant material is transformed into a cannabis product. "Cannabis trim" does not include hemp.
(2) (a) There is hereby imposed, levied and assessed an excise tax on medical cannabis cultivation facilities. A cannabis cultivation facility shall collect and remit an excise tax on forms and in a manner specified by the Commissioner of Revenue.
(b) The excise tax on cannabis cultivation facilities shall be based on the sales price for which a cannabis cultivation facility first sells cannabis flower or cannabis trim, as the case may be, to a medical cannabis establishment, and the rate of the excise tax shall be five percent (5%) of such sales price. However, if there is common ownership or other interest between the cannabis cultivation facility and the medical cannabis establishment to which the cannabis cultivation facility first sells or transfers the cannabis flower or cannabis trim, as the case may be, the excise tax shall be based on the fair market value of the cannabis flower or cannabis trim, as the case may be, at the time that the cannabis cultivation facility first sells or transfers the cannabis flower or cannabis trim to the medical cannabis establishment, and the rate of the excise tax shall be five percent (5%) of such fair market value. The fair market value of cannabis flower and cannabis trim shall initially be determined by the MDOR not later than November 1, 2022. Beginning January 1, 2023, the MDOR shall recalculate and adjust the fair market value of cannabis flower and cannabis trim twice per calendar year on January 1 and July 1.
(c) The excise tax imposed by this subsection shall apply regardless of the ownership of the medical cannabis establishment to which the cannabis cultivation facility sells or transfers the cannabis flower or cannabis trim, as the case may be.
(d) All administrative provisions of the sales tax law and amendments thereto, including those which fix damages, penalties and interest for nonpayment of taxes and for noncompliance with the provision of said sales tax law, and all other requirements and duties imposed upon a taxpayer, shall apply to all persons liable for taxes under the provisions of this subsection. The commissioner shall exercise all power and authority and perform all duties with respect to taxpayers under this subsection as are provided in said sales tax law, except where there is conflict, then the provisions of this subsection shall control.
(e) All excise taxes collected under the provisions of this subsection shall be deposited into the State General Fund.
(3) A dispensary, on forms and in a manner specified by the Commissioner of Revenue, shall collect and remit the sales tax levied in Section 27-65-17(1)(a) from the gross proceeds derived from each retail sale of medical cannabis.
(4) (a) The governing authorities of a municipality, by resolution duly adopted and entered upon its minutes, may impose, levy and assess an excise tax on medical cannabis cultivation facilities. A cannabis cultivation facility shall collect and remit the excise tax to the Department of Revenue on forms and in a manner specified by the Commissioner of Revenue.
(b) The excise tax on cannabis cultivation facilities shall be based on the sales price for which a cannabis cultivation facility first sells cannabis flower or cannabis trim, as the case may be, to a medical cannabis establishment, and the rate of the excise tax shall be three percent (3%) of such sales price. However, if there is common ownership or other interest between the cannabis cultivation facility and the medical cannabis establishment to which the cannabis cultivation facility first sells or transfers the cannabis flower or cannabis trim, as the case may be, the excise tax shall be based on the fair market value of the cannabis flower or cannabis trim, as the case may be, at the time that the cannabis cultivation facility first sells or transfers the cannabis flower or cannabis trim to the medical cannabis establishment, and the rate of the excise tax shall be three percent (3%) of such fair market value. The fair market value of cannabis flower and cannabis trim shall be determined as provided in subsection (2)(b) of this section.
(c) The excise tax imposed by this subsection shall apply regardless of the ownership of the medical cannabis establishment to which the cannabis cultivation facility sells or transfers the cannabis flower or cannabis trim, as the case may be.
(d) All administrative provisions of the sales tax law and amendments thereto, including those which fix damages, penalties and interest for nonpayment of taxes and for noncompliance with the provision of said sales tax law, and all other requirements and duties imposed upon a taxpayer, shall apply to all persons liable for taxes under the provisions of this subsection. The commissioner shall exercise all power and authority and perform all duties with respect to taxpayers under this subsection as are provided in said sales tax law, except where there is conflict, then the provisions of this subsection shall control.
(e) The proceeds of the excise tax collected under the provisions of this subsection, less three percent (3%) thereof to be retained by the Department of Revenue to defray the costs of collection, shall be paid to the governing authorities of the municipality on or before the fifteenth day of the month following the month in which they were collected.
SECTION 2. This act shall take effect and be in force from and after July 1, 2023.