Washington Marijuana Law won’t be blocked by the Feds!

Today, Attorney General Eric Holder confirmed that the Federal Government will not (at least for now) challenge Washington State's recreational marijuana law.

The Attorney General has instructed U.S. Attorneys to use prosecutorial discretion to focus on prosecuting individuals or entities engaged in the following types of activity:

• Preventing the distribution of marijuana to minors;
• Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
• Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
• Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
• Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
• Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
• Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
• Preventing marijuana possession or use on federal property.

This from a Memo to U.S. Attorneys from James M. Cole, Deputy Attorney General.

Presumably, therefore, Federal Prosecutors will focus on prosecuting individuals/entities engaged in the above activities, but not recreational use. Although the Federal government could jump back in to enforce federal law at any time, the Attorney General's guidance on prosecutorial discretion should be welcome news to those in support of recreational marijuana in Washington State.

For more information, see the Seattle Times here.

Washington State Estate Tax

Washington State has its own "stand alone" estate tax.

Washington State estate tax has the following deductions:

1. $2 million statutory deduction (RCW § 83.100.020(13))
2. Deduction for property used for qualifying farm purposes (RCW § 83.100.046)
3. Full Marital Deduction (RCW § 83.100.047)

The marginal Washington estate tax rates range from 10% to 20% and those brackets are shown below. "The Washington Taxable Estate" is the gross estate less applicable deductions (e.g. $2 million statutory + any applicable marital or farm deduction).

Effective through 12.31.13

If Washington Taxable Estate is at least	But Less Than	The amount of Tax Equals Initial Tax Amount	Plus Tax Rate %	Taxable Estate Value Greater than
$0	$1,000,000	$0	10.00%	$0
$1,000,000	$2,000,000	$100,000	14.00%	$1,000,000
$2,000,000	$3,000,000	$240,000	15.00%	$2,000,000
$3,000,000	$4,000,000	$390,000	16.00%	$3,000,000
$4,000,000	$6,000,000	$550,000	17.00%	$4,000,000
$6,000,000	$7,000,000	$890,000	18.00%	$6,000,000
$7,000,000	$9,000,000	$1,070,000	18.50%	$7,000,000
$9,000,000		$1,440,000	19.00%	$9,000,000

RCW § 83.100.040(2)(a)

Effective January 1, 2014: (changes in bold)

If Washington Taxable Estate is at least	But Less Than	The amount of Tax Equals Initial Tax Amount	Plus Tax Rate %	Taxable Estate Value Greater than
$0	$1,000,000	$0	10.00%	$0
$1,000,000	$2,000,000	$100,000	14.00%	$1,000,000
$2,000,000	$3,000,000	$240,000	15.00%	$2,000,000
$3,000,000	$4,000,000	$390,000	16.00%	$3,000,000
$4,000,000	$6,000,000	$550,000	18.00%	$4,000,000
$6,000,000	$7,000,000	$910,000	19.00%	$6,000,000
$7,000,000	$9,000,000	$1,100,000	19.50%	$7,000,000
$9,000,000		$1,490,000	20.00%	$9,000,000

Per EDUCATION—TRUST ACCOUNTS—COLLEGES AND UNIVERSITIES, 2013 Wash. Legis. Serv. 2nd Sp. Sess. Ch. 2 (H.B. 2075)

The pre 1.1.14 Washington State effective tax rate (assuming no farm property, marital deduction or other deductions) is shown below.

Gross Estate Value	Taxable Estate Value	Estate Tax Liability	Effective Tax Rate (Tax liability divided by gross estate value)
$1,000,000	0	0	-.-%
$2,000,000	0	0	-.-%
$2,500,000	$500,000	$50,000	2.0%
$5,000,000	$3,000,000	$390,000	7.8%
$7,500,000	$5,500,000	$805,000	10.7%
$10,000,000	$8,000,000	$1,255,000	12.6%

The above chart can be found here.

Washington State: highest for per capita sales tax collections

The Tax Foundation has recently published a fantastic "State and Local General Sales Tax Collections Per Capita" map (see below).

Washington came in #1 as highest per capita state and local sales tax collections. Washington's per capita collection in FYI 2010 was $1,770.00.

Also according to the Tax Foundation, Washington's combined State & Local tax rate is 8.80% (4^th highest in the nation), previous blog coverage here.

Obama budget proposes capping some IRAs

According to Bloomberg, President Obama's budget plan proposed prohibiting taxpayers from accumulating more than $3 million in an individual IRA. It is unclear how the administration proposes to restrict IRAs in this way and where and why the administration used the $3 million limitation figure.

April 20, 2013 – Washington’s Tax Freedom Day

Washington State's 2013 Tax Freedom day is April 20. Washington is the 9^th latest in the U.S.

Below is the Tax Foundation's 2013 Tax Freedom Day Map.