New challenge for marijuana providers: Tax audits

OLYMPIA — Tax enforcers have started auditing medical marijuana dispensaries in Washington, escalating a dispute over whether the outlets should be collecting money for state government.

The state Department of Revenue has worked since 2010 to tell marijuana establishments that they must remit sales taxes on their transactions. Some 50 dispensaries have registered with the state, helping the state collect some $750,000 in taxes from the industry over the span of one year.

Officials believe there are many other outlets that remain unregistered, and that some registered entities are improperly reporting that they had no taxable business.

Seattle medical marijuana lawyer Douglas Hiatt says he doesn’t believe the state can tax medical marijuana sales, in part because it’s medicine.

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