Cannabis operators and the Michigan Cannabis Industry Association (MICIA) have filed a second lawsuit challenging the 24% wholesale tax imposed on the industry last year by lawmakers, WWMT reports.
The industry’s first lawsuit is going to trial in September after the courts last year declined to block the tax ahead of its implementation. Licensed retailers have been paying the wholesale tax since January.
In its first lawsuit, the MICIA is arguing the wholesale tax is unconstitutional because it alters the state’s voter-approved cannabis reforms, and therefore any changes to the policy require a supermajority in the Legislature.
The second lawsuit — which the MICIA filed alongside fellow plaintiffs Mitten Distro X LLC, a cultivator, and Refine Michigan Co., a retailer — is focusing “on the tax structure itself,” according to MICIA spokesperson Rose Tantraphol.
“This is a tax-on-tax ploy that is resulting in consumers getting hit with an effective sales tax rate that is higher than what’s legal.” — Tantraphol, via 13 ON YOUR SIDE
The lawsuit calls the wholesale tax a “disguised sales tax” that creates an “effective tax rate beyond the constitutionally allowable 6% sales tax rate.”
Michigan state lawmakers approved the wholesale cannabis tax last year with the goal of funding road repairs.
