Cities and counties are not allowed to stack sales taxes on marijuana products, the Missouri Supreme Court ruled on Tuesday.
In a 6-1 decision, the state’s highest court concluded the 2022 constitutional amendment that legalized recreational marijuana limits the definition of “local government” to allow only one municipality to impose a 3% sales tax — a village, town or city in an incorporated area and a county in an unincorporated area.
The drafters of the constitutional amendment “specified a ‘local government’ is based on the area in which the dispensary is located,” the court ruled.
The case focused on Florissant-based dispensary Robust Missouri 3 LLC, where customers have been paying a total sales tax of almost 21% , which includes a 3% sales tax from both the city of Florissant and St. Louis County.
The court’s decision means only the Florissant sales tax can remain in place and will impact more than 70 areas across the state where both city and county governments have been imposing a 3% tax at dispensaries, according to Missouri Department of Revenue data.
Judge Zel M. Fischer was the lone dissent, arguing that the constitutional amendment’s definition of local government clearly includes both incorporated and unincorporated areas. It would, Fischer wrote, therefore allow counties to impose the sales tax and collect it in incorporated areas.
“The patently absurd results of holding that ‘and’ means ‘or’ and that St. Louis County is not a ‘local government’ within its own territorial jurisdiction confirms, once again, that simply applying the constitution’s plain language meaning is the surest way for this court to implement the law as it was intended,” Fischer argued.
That decision reversed a lower court’s ruling last year that allowed both Florissant and St. Louis County to both impose a 3% sales tax on marijuana products.
The ruling also determined the outcome of a second case, currently before the Western District Court of Appeals. In that case, a Buchanan County judge also ruled that taxes could be stacked. The Western District court stopped action in the case while awaiting the Supreme Court decision.
Andrew Mullins, executive director of the Missouri Cannabis Trade Association, said his organization and other industry partners went to court days after the double taxation began in 2023 “to protect the very customers that make Missouri’s marijuana program the envy of other states.”
Tuesday’s ruling, Mullins said, will save Missouri cannabis customers an estimated $3 million every month.
“Missouri customers already pay their fair share, with sales tax revenue from cannabis in Missouri now tripling original state estimates,” Mullins said. “The ruling’s clarity preserves Missouri’s standing as one of the nation’s most impactful and accessible cannabis programs, ensuring patients and adult-use consumers continue to benefit from fair pricing, great service and robust product choice.”
