Sales & Use Tax Blog
tax rate on illinois marijuana

Illinois Marijuana Sales Tax Rate Decrease in Carpentersville


When the Illinois Cannabis Regulation and Tax Act was passed in June 2019 to legalize recreational marijuana use, it gave way for municipalities to establish a sales tax rate on Illinois Marijuana of up to 3%. Many cities within Illinois have opted to optimize this provision and to set their respective marijuana sales tax at 3%. However, there is one city that is hoping to gain a competitive advantage by applying a 2% marijuana sales tax, 1% lower than surrounding cities.

The City of Carpentersville is a small suburb in north Illinois with a population of roughly 37,000. After Jan. 1, 2020 officials plan to begin to issuing licenses for businesses to operate dispensaries within city limits. The aim is to attract companies, despite the low population, by applying the lower than normal Illinois marijuana sales tax. Not only does this mean a lesser charge on sales tax for companies that would operate in Carpentersville, but consumers would see a slight financial benefit as well.

In recent years, the legalization of marijuana has become a hot topic across the nation. Citizens of Carpentersville are wondering what type of crime related activities this new industry will bring to the town, but city officials seem to have a plan in place. In terms of enforcement, city manager, Eric Johnson was has said that “the tax revenue can also help fund the drug recognition training police officers are going to need and the purchase of emerging technology to better detect THC levels.” The question then to be answered is if the lower tax rate on Illinois Marijuana will generate enough revenue to offset these enforcement costs. Only time will tell during the upcoming new fiscal year, but luckily for Carpentersville, as a part of the Act, the freedom to increase the marijuana sales tax is at the city’s discretion, provided it does not exceed the 3% cap. This means that if Carpentersville does see a financial deficit with the 2% rate implemented Jan. 1, 2020, then the city can increase that rate up to 3% at any time.

No Comments

Post A Comment

Ready to Get Started? Speak with an Expert...