We’ve already written about how owners of legitimate marijuana businesses are being forced to pay their taxes in cash because federally insured banks are unwilling to let them open bank accounts. These payments then pose a problem for the state, which has to worry about finding a place to deposit the tax revenue.
For example, the state of Washington has been using Bank of America for years and has a contract with BofA that runs through next June.
Bank of America hasn’t previously had a problem accepting tax revenue that included taxes from medical marijuana businesses, but that money is all lumped in with other tax revenue and collectors could have — if pressed — pleaded ignorance about the source of the money.
Starting in November, the state will begin collecting licensing fees from businesses applying to grow and sell marijuana. It will be significantly more difficult for the state to pretend that it’s not bringing in potentially hundreds of millions of dollars each year related to a product that is still considered an illegal drug by the federal government.
Some officials in Washington state are worried that blending revenue from pot-based businesses will taint the billions of dollars the state puts in the bank. The state’s revenue forecasters are not including marijuana revenue in their projections until state regulators gets assurances from Washington, D.C., that there won’t be a problem with putting this money in a federally insured bank like BofA.
The state’s Assistant Treasurer tells The Olympian that Bank of America has “checked this out with their compliance department and they don’t see it as any different than say, medical marijuana or any other activity… There could be other illegal activities going on in this state that happen to be in the tax base.”
Treasurer Jim McIntire is even more optimistic.
“I’m not too worried about it,” he explains to The Olympian. “It’s actually one of the advantages of having Bank of America as your contractor. It’s unlikely, I think, that the federal government would raid them… And they’re big enough to look out for themselves on this.”
McIntire must not be terribly familiar with the current lack of love between the federal government and BofA.
Meanwhile, when asked what it would do if it saw tax revenue itemized as coming from marijuana-based businesses, a rep for Bank of America tells Smell the Truth, “If the proceeds can be directly tied to cannabis operations, we would not bank it.”
We’ll all find out soon enough, when Washington tries to deposit its first batch of tax revenue from licensed marijuana operations.