Effective Date: November 9, 2021

Summary

Provides guidance on accounting for revenues related to the activities of marijuana on the local level.

Accounting for Marijuana Revenues

The following guidance is related to only local units of government. Charges dedicated to the state that are not passed through to local units are not included.

Annual Fee

MCL 333.27956 A municipality may charge an annual fee of not more than $5,000 to defray application, administrative, and enforcement costs associated with the operation of the marihuana establishment in the municipality.

This revenue source is related to licenses and permits. Consequently, one may use an open account between 478 and 489 in the General fund. For example, one may use 101-000-478. Since they are restricted to those items in the paragraph above, fund balance should be restricted until used.

Excise Tax

MCL 333.27963 In addition to all other taxes, an excise tax is imposed on each marihuana retailer and on each marihuana microbusiness at the rate of 10% of the sales price for marihuana sold or otherwise transferred to anyone other than a marihuana establishment.

This revenue source is assessed by the state and passed to local units of government at varying rates. There are no restrictions on the use of these funds and should be accounted for using account 101-000-439, Marijuana Tax.

If you have any questions, please email our office at TreasLocalGov@michigan.gov.