Though alcohol consumption and tobacco smoking are legal throughout America, cannabis smoking is not legalized in many states. People have to pay taxes on these products. The tax rate varies from one state to another. We are going to talk about the tax rate of some of the states.
Colorado is the first state to legalize the sale of recreational cannabis. Consumers pay 2.9% state sales tax, 15% excise tax and 10% marijuana sales tax So, in total, a buyer has to pay 27.9% to buy recreational marijuana. On the other hand, the medicinal buyers will pay only 2.9% tax. In Washington, the tax rate is 44%.
The tax set for alcohol is calculated in terms of volume. So, in Colorado, for every gallon of beer you need to pay a tax of 8 cents, for wine it’s 28 cents and for liquor, it’s $2.28. In Washington, consumers only need to pay the 6.5% state sales tax for beer and wine. For liquor, they have to pay tax of $3.77 per liter tax and 20.5% sales tax.
In Colorado, you will need to pay 84 cents state tax for every cigarette pack you buy. For other tobacco items, you will need to pay 40% tax. The sales tax for a cigarette is 2.9%. In Washington, you will need to pay $3.02 state tax for every pack of cigarette. You need to pay $2 per pack of the cigarette as a tax in California.
The tax imposed on cannabis, alcohol, and tobacco is called ‘sin’ tax. This is because these products are harmful to the health and the government discourages the consumption of these products. Some states have raised the legal age limit for tobacco consumption to 21. The high tax for these products is also a way to discourage people to buy these products.