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Alaska ranks highest, New Jersey lowest in adult-use marijuana taxes, report says

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Alaska’s recreational marijuana taxes are the highest in the country, and New Jersey’s are the lowest.

That’s according to Richard Auxier and Nikhita Airi, the authors of the Urban-Brookings Tax Policy Center’s September report, “The Pros and Cons of Cannabis Taxes.”

But it’s a tough comparison to make. No two states where adult-use marijuana is legal approach cannabis taxes the same way.

“Every state is a special and unique flower,” Auxier, senior policy analyst for the Tax Policy Center, told MJBizDaily.

From excise taxes to weight-based taxes to potency taxes to wholesale taxes and their respective rates, those discrepancies can make it difficult to compare adult-use marijuana taxes across the United States.

Such a patchwork can also complicate tax planning for cannabis businesses with aspirations to expand to multiple states.

That’s why Auxier and Research Analyst Nikhita Airi took a creative approach to examining marijuana taxes in various states in their report: comparing the taxes on a retail purchase of 1 ounce of cannabis flower in the 19 states where adult-use taxes were enacted by September 2022.

To create the comparison without getting bogged down in price discrepancies between states, Auxier and Airi decided that the hypothetical retail price of an ounce of cannabis flower before taxes in each state is $100 – a round number that falls between the wholesale cost of an ounce in Colorado ($44) and Nevada ($130).

The authors acknowledge that the actual retail price of an ounce would be higher for customers in most states.

To deal with THC-potency tax rates in some states, Auxier and Airi’s hypothetical ounces all came in at 20% THC.

And to keep it simple, wholesale taxes were applied to the purchase price for each ounce, and it was assumed all wholesale taxes were passed on to customers.

By far, Alaska had the highest estimated tax on an ounce at $57.50, largely attributed to the $50-per-ounce tax on cannabis flower in that state.

It’s the highest weight-based tax rate in the United States. The remaining $7.50 is from a local percentage of price excise tax in Anchorage.

But Auxier and Airi weren’t critical of the high tax rate, advising that it’s much easier to decrease a tax rate in the future than to raise it.

“There’s no failure at the outset because we’re all trying and learning,” Auxier said.

“If there’s ever a failure, it’s because you don’t update and change as circumstances change.”

Washington state had the second-highest total taxes on a hypothetical ounce at $47.25.

But the authors warn that prices in Washington state are lower than average, meaning that the actual price of the ounce would be lower.

And because all cannabis taxes are calculated as a percentage of the retail price, the total tax paid on an ounce would very likely be lower.

New Jersey and Michigan had the lowest total taxes on a hypothetical ounce at $14.32 and $16, respectively.

Michigan, with its higher retail prices and only a 10% excise tax and a 6% general sales tax, is a fairly accurate estimate.

At 6.625%, New Jersey’s tax rate is intentionally low to help legal businesses compete with the unregulated market.

But similar to California, local governments in New Jersey can add a gross receipts tax on regulated retailers, distributors and cultivators.

That means the authors could have underestimated the total tax on an ounce in New Jersey, where it’s difficult to calculate where a local tax is being applied.

For the purposes of the calculation, the authors added a 2% gross receipts tax to three parts of the supply chain: cultivation, distribution and retail.

It also means New Jersey is on the list of states the authors are watching.

Will the market play out similarly to California, where local taxes are also common, or are the markets different in other ways?

“(The gross receipts tax) is the one that businesses really hate,” said Auxier, referring to the tax California municipalities levy on cannabis purchases.

“You’d think New Jersey would learn from California. (State regulators) actually did considerable work on how tax revenue would help fund programs for social equity and how taxes need to be low to compete with illicit sellers, but they also went ahead with allowing the gross receipts tax.”

As for states with a cannabis tax the authors approve of?

“I like New Mexico because they just did a simple retail tax, but they did it so that the rate escalates” Auxier said.

By 2025, New Mexico’s cannabis retail tax will increase from 12% to 13%.

“It’s basically assuming that the price of the product will come down,” Auxier added.

More highlights from the report and its authors:

  • 2022 was the first fiscal year in which any state cannabis tax revenue declined from the previous year: California, Colorado, Nevada, Oregon and Washington – the more mature legal markets – all saw declines, while Alaska stayed flat.
  • For fiscal year 2022, California collected the most state cannabis tax revenue at $744.4 million, or $20 per capita. Cannabis taxes accounted for 0.3% of total state tax revenue (excluding local taxes).
  • Washington state and Colorado had the highest per capita taxes for fiscal year 2022, at $67 and $61, respectively.
  • Maine had the lowest per capita total for state cannabis taxes, at just $13 per capita.
  • The most popular approach to taxation of marijuana is through a retail tax, which is more streamlined from an administrative perspective. Wholesalers don’t have to pay it out, for example.
  • The authors didn’t investigate a relationship between high taxes and illicit markets while cautioning that other factors are related to how a legal market is operating, such as how many and where legal stores are.
  • Local taxes are among the most burdensome on consumers and have been blamed for some of the challenges facing the industry in California, for example. But they are often necessary for municipal governments to buy into allowing cannabis businesses to open.
  • Potency-based taxes are designed to disincentivize consumers from buying higher-potency products, but they could also incentivize consumers to buy potent products from the illicit market.
  • Connecticut and New York’s forthcoming adult-use cannabis markets will be the first to levy a tax calculated per milligram of THC. Illinois also taxes cannabis based on potency, but that state assigns a higher sales-tax percentage to more potent products.

Source: https://mjbizdaily.com/alaska-ranks-highest-new-jersey-lowest-in-adult-use-marijuana-taxes/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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