Missouri Court Rules ‘Stacking’ Cannabis Taxes is Prohibited

The Missouri Court of Appeals Eastern District ruled Tuesday that local governments cannot stack cannabis industry sales taxes, Gannett reports. The ruling reverses a lower court’s decision from May that allowed the city of Florissant and St. Louis County to impose a 3% sales tax on adult-use cannabis sales.

In the decision, the panel of appellate judges said that the state constitution’s “plain, unambiguous” language only allows “one local government…to impose an additional three percent sales tax.”

Due to the stacked taxes, customers at Florissant dispensaries were paying a total of 20.988% in sales taxes on adult-use cannabis products.

The primary question before the panel was: what did voters intend by “local government” when they approved the adult-use cannabis reforms in 2022? The appellate panel determined the answer to that question is in “an incorporated area like Florissant, the village, town, or city is the ‘local government,’ not the county.”

In an interview with Gannett, Andrew Mullins, executive director for the Missouri Cannabis Trade Association, said the ruling “helps put $3 million back into the pockets of Missouri customers each month.”

According to data from the Missouri Department of Revenue, 90 of the state’s 114 counties have enacted a 3% cannabis sales tax with 74 including a municipality that has imposed the tax, meaning both city and county governments have been imposing a 3% tax at dispensaries.

Doug Moore, spokesman for St. Louis County, told Gannett that officials are “reviewing the ruling and determining next steps.”

“It is unclear at this point what the financial impact would be,” he said.

A similar case is pending in Buchanan County.