A draft of legislation submitted to Gov. Phil Murphy last week held taxes on recreational sales at 12 percent, which would make New Jersey‘s tax rate one of the lowest among states with a legal cannabis program, according to three sources with knowledge of the most recent draft. Local governments would be able to impose a separate excise tax on sales of up to 2 percent.
Earlier this year, administration officials said they’d like to see recreational marijuana taxed at around 25 percent — a rate legislative leaders said would allow the drug’s underground market to thrive.
While subsequent drafts from the Legislature increased the sales tax from 10 percent to 12 percent, neither side has shown any indication of budging further. Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin met last month to discuss legalization, but the administration’s problems with a draft of the legislation remain unchanged from earlier this year, five sources with direct knowledge of the talks said.
“We’re at an impasse over some of the aspects of the bill," an administration source said Monday.