KANSAS CITY, Mo. — The three-judge panel of the Missouri Court of Appeals in the Eastern District unanimously declared Tuesday the practice of “stacking” marijuana sales taxes is unconstitutional.
After Missouri voters passed the legalization of adult-use recreational marijuana in 2022, local governments raced to capitalize by implementing sales taxes on marijuana sales.
While the implementation of the 3% local sales tax was clear enough within city limits and incorporated county areas, the issue was less clear if counties could add an additional 3% tax on top of — or stack — the 3% tax already levied by a local city or town.
Several counties across the state, including Jackson and Cass counties in the Kansas City area, passed a county-wide marijuana sales tax.
St. Louis and St. Charles counties in the St. Louis area also passed the county-wide tax, which prompted Robust Missouri Dispensary 3 to file a civil lawsuit in October 2023.
PREVIOUS COVERAGE | Lawsuit alleges ‘stacking’ taxes on marijuana sales in Missouri ‘unconstitutional’
Initially, the circuit court ruled in favor of a county’s ability to levy a county-wide tax on top of any tax already applied by a local village, town or city.
Robust Dispensary appealed the circuit court’s ruling to the appeals court, which released its opinion Tuesday.
LINK | Read the court's opinion
“The plain language of Article XIV is unambiguous,” the appeals court wrote in their opinion. “Only one local government is authorized to impose an additional three percent sales tax.”
Tuesday’s opinion also prevents “the further collection of retail sales taxes by multiple governments.”
The opinion was celebrated by MoCannTrade, an industry group that advocates for the implementation of a “successful, safe, compliant medical and adult-use cannabis program in Missouri."
The group estimates Tuesday’s ruling will save $3 million a month.
“Today’s ruling helps put $3 million back into the pockets of Missouri customers each month and will allow the industry to continue to contribute hundreds of millions each year in sales tax revenue to the state and our local communities,” MoCannTrade executive director Andrew Mullins said Tuesday in a press release.
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