• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

LA voters to decide on marijuana tax

November 24, 2010 12:00:00 AM PST
Voters in Los Angeles will decide whether or not they want to tax medical marijuana dispensaries, despite the fact that the city attorney says such a tax would be illegal.The Los Angeles City Council voted Wednesday to put the issue before voters in March, calling the tax a "gross reimbursement fee" to avoid what the City Attorney has determined to be an illegal tax.

Because the marijuana collectives are technically non-profits their sales cannot be taxed. The city council argues a fee of 50 cents per $1,000 of marijuana sold would be considered part of the reimbursement cost that buyers make to the dispensaries.

The council says such a tax could raise about $5 million in revenues a year for the city.