Leaders and finance officials from various counties in New York are pressing the New York State Office of Cannabis Management (OCM) to rectify significant issues in the cannabis sales tax distribution system. During the recent annual county finance school held in Warren County, treasurers, comptrollers, and budget officers expressed their frustration with the current process, which hampers their ability to allocate cannabis tax revenue to local municipalities effectively.
Under the Marihuana Regulation and Taxation Act (MRTA), counties are required to distribute 75% of the local 4% cannabis excise tax to the municipalities where dispensaries operate. However, many counties report not receiving timely or complete sales data from OCM, which is crucial for determining how much tax revenue each municipality should receive.
According to the MRTA, counties must disburse cannabis tax revenues within 30 days after they receive the funds from the State Comptroller. This timeline has proven difficult for counties due to ongoing delays in receiving the necessary sales breakdowns from OCM. The lack of essential information has disrupted the flow of tax revenue to cities, towns, and villages, creating confusion and frustration among local officials.
“County officials have repeatedly reached out to OCM for guidance with limited response,” stated NYSAC President Benjamin Boykin II. He emphasized that the ongoing communication issues jeopardize public confidence in the cannabis program and create unnecessary tensions between counties and their municipalities.
The intended tax distribution process requires dispensaries to report sales taxes quarterly to the Department of Taxation and Finance. Subsequently, the Office of the State Comptroller distributes funds to the counties, which then rely on OCM to provide sales information before making payments to municipalities. When counties do not receive this data, the entire distribution system falters.
NYSAC Executive Director Stephen J. Acquario highlighted that counties have made a good faith effort to implement the state’s cannabis market goals. He called on OCM to promptly resolve these information gaps and establish reliable procedures for sharing sales data with counties to ensure tax benefits reach the communities hosting these businesses.
This ongoing situation has prompted county leaders to demand immediate action from the OCM to improve the sales tax reporting and distribution framework, ensuring that local governments can effectively manage and benefit from the cannabis industry.
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