AN ACT Relating to authorizing a local excise tax on cannabis;
Summary
SB 5650 authorizes counties, and in some cases cities, to impose a local excise tax of up to 2 percent on the retail sale of cannabis concentrates, usable cannabis, and cannabis-infused products. A county may adopt the tax by ordinance only after receiving prior voter approval at a special or general election, and the tax may be imposed for up to seven consecutive years. If a county has not adopted the tax by July 1, a city within that county may seek to impose the tax under the same voter-approval and ordinance requirements, also for up to seven years.
The bill also allows a county or city to reimpose the tax for additional seven-year periods, again subject to ordinance and voter approval. The tax is in addition to any other authorized taxes and applies to taxable cannabis retail events within the jurisdiction. The Washington State Liquor and Cannabis Board would administer collection on behalf of local governments, and the state treasurer would distribute the proceeds monthly according to formulas that differ depending on whether the tax was imposed by a county or a city. The bill specifies that local governments must contract with the board before the tax takes effect, and the board may retain up to 1 percent for administrative costs.
Impact
This bill would amend Washington law by adding a new section to chapter 82 RCW to create explicit local-option taxing authority for cannabis sales. It would give counties and certain cities a new revenue tool tied to cannabis retail activity, while also establishing collection, administration, and distribution procedures through the Liquor and Cannabis Board and state treasurer. The measure would affect cannabis retailers, local governments, and the state agencies responsible for tax administration, but it would not create a statewide cannabis tax increase; instead, it would authorize optional local excise taxes where voters approve them.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the overall sentiment appears neutral and procedural rather than contentious. The bill is framed as a local revenue measure with voter approval safeguards, suggesting an effort to balance local fiscal flexibility with direct public consent. No committee debate or roll-call history is available here to indicate organized support or opposition.
Contention
The main points of potential contention are likely to be the expansion of local taxing authority, the added tax burden on cannabis consumers and businesses, and the requirement that voters approve the tax before it can be imposed. Local governments may favor the revenue opportunity, while cannabis retailers and tax opponents may object to higher retail prices or to allowing multiple jurisdictions to layer taxes. Another possible issue is the administrative role of the Liquor and Cannabis Board, including whether the 1 percent administrative deduction and revenue-sharing formulas are sufficient or equitable.