[Congressional Record (Bound Edition), Volume 159 (2013), Part 1]
[Extensions of Remarks]
[Page 965]
[From the U.S. Government Publishing Office, www.gpo.gov]




          INTRODUCTION OF THE MARIJUANA TAX EQUITY ACT OF 2013

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                          HON. EARL BLUMENAUER

                               of oregon

                    in the house of representatives

                       Tuesday, February 5, 2013

  Mr. BLUMENAUER. Mr. Speaker, today, I am pleased to introduce the 
Marijuana Tax Equity Act of 2013, legislation to create a federal 
excise tax on marijuana sales and move this industry out of the shadows 
and into the daylight. Just over 106 million people live in a state or 
local jurisdiction that has decided that some aspect of marijuana use 
should be legally permitted. Eighteen states and the District of 
Columbia currently allow for medical marijuana and two states, Colorado 
and Washington, recently legalized the recreational use of small 
amounts of marijuana.
  National trends reflect those state efforts. More than 40 percent of 
Americans over the age of 12 have tried marijuana at least once and 
public opinion research reveals half of the U.S. population supports 
legalization. Yet even as states and local governments have taken the 
lead in finding legal arrangements for marijuana, millions of people 
have been caught in the justice system for marijuana offenses and more 
than 660,000 people were arrested for marijuana possession in 2011. At 
the same time, the federal government spends approximately $5.5 billion 
per year on incarceration and enforcement associated with federal 
marijuana laws.
  In addition, many marijuana businesses around the country--despite 
operating in compliance with state or local law--are not allowed to 
deduct their legitimate business expenses and often are unable to make 
deposits or maintain accounts as a result of federal banking laws.
  It is time for Congress to end the federal prohibition on marijuana, 
remove it from the Controlled Substances Act, and create a tax and 
regulatory framework, similar to the frameworks in place for alcohol 
and tobacco. This represents a unique opportunity to save ruined lives, 
wasted enforcement and prison costs, while simultaneously helping to 
create a new industry, with new jobs and revenues that will improve the 
federal budget outlook.
  The Marijuana Tax Equity Act creates a taxation framework similar to 
that in place for the tobacco and alcohol industries. It imposes an 
excise tax of 50 percent on the first sale by a producer, generally the 
grower, to the next stage of production, generally the processor 
creating the useable product. Along the supply chain it requires 
occupational taxes for those operating marijuana businesses. Those who 
do not comply with the taxation laws face civil or criminal penalties 
similar to those in place for the tobacco industry. The bill requires 
the IRS to produce periodic studies of the industry and make 
recommendations to Congress.
  As I work with my colleagues and with our stakeholders to move 
forward with this legislation, I emphasize that there remain 
significant questions and challenges. In particular, in the context of 
legislation, significant changes will ripple through the marijuana 
industry, with new products created, new business relationships 
developed, new consumer standards demanded, and wide variations in 
state and local laws. As this process evolves, we hope to work with the 
industry to ensure that the tax rate and framework appropriately 
reflects federal concerns and the needs of this developing industry. I 
am committed to ensuring that the legislation's terms are adequately 
tailored to reflect the realities faced by marijuana businesses and 
consumers in an ever-shifting market.
  In addition, the medical marijuana industry has distinct concerns 
about safe access and those should be adequately addressed in the 
federal framework. Together with my colleagues, I look forward to 
continuing our efforts on ensuring safe access for patients within the 
context of an administrable tax and regulatory regime.
  It is important to note that states will remain free to make 
decisions about marijuana policy. Paired with Representative Polis' 
``Ending the Federal Marijuana Prohibition Act,'' this legislation 
establishes a starting point for laying out a federal regulatory and 
taxation framework for marijuana sales that are legal under state law.

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