'A significant advantage for New Jersey'
New Jersey's recreational marijuana will be taxed at the state's general tax rate of 6.625%, while New York's recreational marijuana legalization law imposes a 13% sales tax on weed sales.
“One thing that does potentially project a significant advantage for New Jersey is the tax rate," New Frontier Data’s Chief Knowledge Officer John Kagia told Yahoo Finance, adding that the difference between the two tax rates "does make New Jersey more attractive."
Still, in New Jersey, the tax for marijuana may end up being higher than 6.625%, because local governments can impose additional taxes on sales between businesses and on sales to consumers, according to Jennifer Benda, a tax attorney and certified CPA who specializes in cannabis regulation.
On top of state sales and potential local taxes, New Jersey imposes a state-level social equity tax on transfers of marijuana from producers to retailers that varies based on fluctuations in marijuana prices. As prices drop, tax rates jump, and vice-versa, Benda said.
New York, on the other hand, imposes a state-level excise tax on transfers of marijuana from producers to retailers that varies based on the amount of THC in a product, in addition to the 13% sales tax.