Cannabis Company Files Lawsuit Against ‘Stacking’ of Adult-Use Sales Taxes

A Missouri cannabis company is suing the state claiming the sales tax stack on adult-use cannabis sales is unconstitutional, KSHB 41 reports. St. Louis County-based Robust Missouri Dispensary 3 argues that the 3% tax passed by voters in Jackson and Cass counties violates state law and that in February the Missouri Department of Revenue issued a statement that clarified “based on constitutional language, a city and a county cannot ‘stack’ the additional up to 3% local tax on recreational marijuana sales.”

That interpretation is based on Article XIV of the Missouri Constitution, which reads: “The governing body of any local government is authorized to impose, by ordinance or order, an additional sales tax in an amount not to exceed three percent on all tangible personal property retail sales of adult use marijuana sold in such political subdivision.” The “local government” language means a county, according to the Revenue Department interpretation outlined in the lawsuit and, therefore, St. Louis County dispensaries located within incorporated areas are only subject to a municipality sales tax.

Later in February, the Revenue Department issued a statement saying the language of Article XIV is “ambiguous” and that it was rescinding the previous guidance. The statement said that there are “two interpretations” of what “any local government” means and that the agency would no longer advise municipalities or counties on whether or not they could stack sales taxes on adult-use cannabis sales.

The lawsuit seeks to settle in court which interpretation of Article XIV is constitutional and whether or not Missouri counties can stack sales taxes on top of municipal sales taxes for cannabis businesses operating in incorporated areas.