Failure to collect recreational marijuana tax will cost St. Louis $500K

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(The Center Square) – The city of St. Louis will lose approximately $500,000 in tax revenue after it failed to submit documents with the Missouri Department of Revenue to collect a voter-approved recreational marijuana tax.

City voters approved a 3% tax on recreational marijuana in April. State law would have allowed the city to begin collecting the tax on Oct. 1 if paperwork was filed by June 30.

Bill 139 was passed unanimously by the St. Louis Board of Aldermen last December to ask voters for permission to tax recreational marijuana by 3%. The state tax on recreational marijuana was set at 6% when Missouri voters approved the initiative last November.

“The City wishes to impose an additional sales tax to support efforts for the residents of the City of St. Louis to address historic inequalities,” the bill stated. “These efforts may include but are not limited to funding access to education, workforce opportunities, and youth engagement.”

“This is absolutely a preventable misstep,” Cara Spencer, a Democratic alderwoman who lost to Tishaura Jones in last year’s mayoral race, told KSDK. “I’m hoping that we can get to the bottom of it in our budget committee … exactly what happened here, what went wrong and make sure that we have clearly defined roles in our city departments that can prevent something like this from happening ever again.”

The mistake will result in a loss of between $480,000 and $600,000 in tax revenue, according to reports by multiple media outlets. The loss is based on estimated sales projected by the city.

Nick Dunne, a spokesman for Jones, told the St. Louis Post-Dispatch a city finance employee alerted the mayor’s office about the problem on Nov. 13.

“We’re grateful that they told us because we had no idea,” Dunne said.

The city submitted the proper documents and secured a waiver this week to begin imposing the tax in January, according to the Post-Dispatch report.

“We are looking at what we can do to more clearly define lines of responsibility,” Dunne said.

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