Lawmakers pause 24% marijuana tax for a year

Summary#

HB 6440 would amend section 5 of Michigan’s 2025 PA 23, the Comprehensive Road Funding Tax Act. It would pause the Act’s 24% excise tax on specified wholesale marihuana sales for one year, starting when the amendment takes effect. The bill is introduced and is not law; its stated aim is a temporary suspension of that tax.

  • The pause would cover the tax on the first transfer from a marihuana establishment to a retail licensee, certain marihuana cultivated or processed for retail sale by the retail licensee, and transfers from a provisioning center to a retail licensee.
  • The tax would otherwise remain 24% of the wholesale price, in addition to other taxes. The bill does not cancel it permanently.
  • The bill does not change who is liable for the tax in those situations: the establishment, retail licensee, or provisioning center, as applicable.

What it means for you#

  • Marihuana establishments, retail licensees and provisioning centers: The specified 24% excise tax would not be imposed during the one-year pause. The bill does not say whether businesses would change their prices.
  • Consumers: The bill does not directly change consumer tax rates or require lower retail prices.
  • General public: The bill changes the timing of a state tax, not the rules for buying or using marihuana described in the supplied text.

Money#

No publicly available information gives an estimate of the bill’s effect on state revenue or other costs.

  • State revenue from the specified excise tax would be forgone during the pause, but the amount is not stated.
  • The tax is in addition to other taxes; the bill does not suspend those other taxes.

What is unclear#

  • The bill’s effective date is not specified in the supplied text. The one-year pause would begin on that date.
  • The text does not say whether tax paid for periods before the pause would be refunded or adjusted.
  • The text does not state the exact date the tax resumes; it says the pause ends on the date one year after the amendment takes effect.
  • The parent Act and other current-law materials were not supplied, so the existing law and any later changes to it could not be verified.
  • No publicly available information explains whether the state expects the pause to affect retail prices or business activity.

Case for#

  • A temporary pause would give the businesses liable for the specified tax a break from the 24% levy during the pause.
  • The bill preserves the tax outside that period, rather than permanently removing it.
  • This could be seen as a time-limited way to reduce the tax burden without changing the other taxes the bill leaves in place.

Case against#

  • The state would give up revenue from the specified tax during the pause, but the bill provides no estimate of how much.
  • The bill does not explain why the pause is needed or how its one-year length was chosen.
  • It is unclear whether any tax already paid for the period before the amendment takes effect would be refunded or adjusted.
  • The bill does not require businesses to pass the tax break on to consumers through lower prices.