BILL REQ. #:  H-3189.1 

Prefiled 01/10/14. Read first time 01/13/14.   Referred to Committee on Finance.

     AN ACT Relating to providing tax relief to qualifying patients for purchases of marijuana for medical use; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; creating a new section; providing an effective date; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds marijuana use for qualifying patients is a valid and necessary option health care professionals may recommend for their patients. The legislature further finds that although there is a distinction between recreational and medical use of marijuana, the changing environment for recreational marijuana use in Washington will also affect qualifying patients. The legislature further finds that while recognizing the difference between recreational and medical use of marijuana, it is also imperative to distinguish that the authorization for medical use of marijuana is different from a valid prescription provided by a doctor to a patient. The legislature further finds the authorization for medical use of marijuana is unlike over-the-counter medications that require no oversight by a health care professional. The legislature further finds that due to the unique characterization of authorizations for medical use of marijuana, the policy of providing a tax preference benefit for patients using an authorization should in no way be construed as precedence for changes in the treatment of prescription medications or over-the-counter medications. Therefore, the legislature intends to provide qualifying patients a retail sale and use tax exemption on purchases of marijuana for medical use when authorized by a health care professional.
     (2)(a) This subsection is the tax preference performance statement for the retail sale and use tax exemption for marijuana purchased by qualifying patients provided in section 2 of this act. The performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
     (b) The legislature categorizes the tax preference as one intended to accomplish the general purposes indicated in RCW 82.32.808(2)(e).
     (c) It is the legislature's specific public policy objective to provide qualifying patients a retail sale and use tax exemption on purchases of marijuana for medical use when authorized by a health care professional.
     (d) To measure the effectiveness of the exemption provided in this act in achieving the specific public policy objective described in (c) of this subsection, the joint legislative audit and review committee must evaluate the actual fiscal impact of the sale and use tax exemption in this legislation compared to the estimated impact in the fiscal note for this legislation.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.08 RCW to read as follows:
     (1) Subject to the conditions and limitations provided in this section, the tax levied by RCW 82.08.020 does not apply to the sales of usable marijuana or marijuana-infused products for qualifying patients.
     (2) The exemption authorized in this section only applies to purchases made from marijuana retail outlets authorized under chapter 69.50 RCW. Retail outlets that sell sales tax exempt usable marijuana or marijuana-infused products are required to file their tax return electronically with the department.
     (3) Each marijuana retail outlet making exempt sales is required to maintain records of qualifying patient authorizations provided by the purchaser.
     (4) For sellers who electronically file their taxes, the department must provide a separate tax reporting line for exemption amounts claimed under this section.
     (5) The definitions in this subsection apply throughout this section.
     (a) "Qualifying patient" has the same meaning as provided in RCW 69.51A.010.
     (b) "Usable marijuana" has the same meaning as provided in RCW 69.50.101.
     (c) "Marijuana-infused product" has the same meaning as provided in RCW 69.50.101.

NEW SECTION.  Sec. 3   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply to the use of usable marijuana or marijuana-infused products purchased by a qualifying patient from an authorized marijuana retail outlet under chapter 69.50 RCW.
     (2) The definitions, conditions, and limitations in section 2 of this act apply to this section.

NEW SECTION.  Sec. 4   This act takes effect July 1, 2014.

NEW SECTION.  Sec. 5   This act expires July 1, 2024.