Are Phoenix medical marijuana business skirting tax laws?

The Maricopa County Assessor Office looks at major violations from medical marijuana businesses not in compliance with state property tax.

PHOENIX – A lot goes into growing and selling medical marijuana, and the Maricopa County Assessor’s Office has its eyes on the industry for a certain tax.

Special lighting, temperature control systems, and computers, even ovens, sinks, trays and more must be reported by businesses and taxed.

"All of those things are business personal property. [They] must be reported to [the Assessor’s Office] and you must pay a tax on them,’ said Assessor Paul Peterson.

But what if that's not happening?

Peterson said it can get complicated, but his office is willing to help businesses that have yet to comply, “just like I would do with any other business,” he said.

But we wanted to know why the emphasis on medical marijuana, and why now?

Ryan Boyd, the assessor's public information officer, said it comes down to the numbers, explaining the office sent out 502 forms -- which are used to declare business personal property.

Of the 45,000 businesses in the county, 43,000 returned the form. That's about 95 percent compliance.

Zeroing in on the marijuana industry, there are 109 businesses. We verified only 11 of those businesses returned the form. That means roughly 90 percent of businesses did not to comply.

"That's a very dismal rate of return,” said Peterson.

But are dispensaries breaking the law? Yes, and no.

We can verify the law isn't new, and it affects all businesses. Peterson admits it's possible the business owners simply may not have been aware, since they are technically state nonprofits, which normally do not pay this specific tax.

Mark Steinmetz, founder and licensee of Nature's Medicine Dispensary, agreed.

“It's not an illogical assumption. We don’t pay a state income tax. Why would we pay a state property tax?” said Steinmetz.

He also said he has been compliant since he opened up shop but only because he specifically asked.

There really hasn't been any enforcement of this tax law before in the medical marijuana industry.

Petersen said the stricter enforcement was inspired by a recent tour he took of a local grow facility and dispensary, which the assessor's office refused to name.

"I looked around and thought, 'Man, there is a lot of personal property here,” he said, and he saw dollar signs for our economy -- about a million a year.

"That's not chump change,” said Petersen. “That's real dollars that could help school districts."

For more information on the tax laws, and to learn if you qualify for an exemption, visit the Maricopa County Assesosor's Office website.

© 2017 KPNX-TV


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