On January 18, 2018, the Michigan Department of Treasury issued a new policy that placed a 6% use tax to the State on the cost patients pay their caregivers for medical cannabis products!

REVENUE ADMINISTRATIVE BULLETIN 2018-2 is a document that explains the marihuana provisioning center tax imposed by the Medical Marihuana Facilities Licensing Act (MMFLA) and the sales and use tax treatment of marihuana and marihuana-derived products sold pursuant to the MMFLA and the Michigan Medical Marihuana Act (MMMA).

The Department explains it's new policy regarding the imposition of the General Sales Tax and the Use Tax as it applies to the MMMA in one of it's conclusions. It states;

A registered primary caregiver under the MMMA “may receive compensation for costs associated with assisting a registered qualifying patient13 in the medical use of marihuana. Any such compensation does not constitute the sale of controlled substances.” Therefore, primary caregiver provision of marihuana and marihuanaderived products in compliance with the MMMA is a non-taxable service and not subject to sales or use tax. However, a qualifying patient that receives marihuana from a primary caregiver is liable for use tax at a rate of 6% of the “purchase price” of the marihuana. Use tax should be remitted and reported annually on the qualifying patient’s Michigan Individual Income Tax Return (Form MI-1040).

Example 2. Carrie is a caregiver under the MMMA. Carrie provides marihuana in exchange for $100. Carrie is not liable for sales tax on the $100 since sales by caregivers under the MMMA are a non-taxable service. However, Paul is liable for use tax based on the purchase price of the marihuana. Paul should report and remit $6 in use tax for the use and consumption of this property on line 23 of his Michigan Individual Income Tax Return (MI-1040).

Nobody knows how the State plans to enforce this new policy. Will Treasury staff members cross-reference patients and their tax returns? Will law enforcement officials be able to use this policy as leverage against patients to encourage them to accept a plea arrangement with prosecutors? The Michigan Medical Marihuana Act was approved by over 3,000,000 voters and designed to protect the relationship between a patient and his or her caregiver. This policy is the antithesis of what voters enacted in November of 2008 and we need you to ACT NOW and send this urgent message to the man who approved this policy.

The board members of Michigan NORML thank you for your support!

The Michigan Affiliate of the National Organization for the Reform of Marijuana Laws