The Oregon weed tax is a 17% state excise charged on every recreational marijuana purchase, and cities or counties can add up to 3% more if local voters approved it. That puts the total at the register anywhere from 17% to 20% depending on where you shop. Medical cardholders pay nothing. Because Oregon has no general sales tax, this is one of the few point-of-sale taxes you’ll see in the state.
What You Pay at the Register
ORS 475C.674 sets the state rate at a flat 17% on the retail price of recreational flower, edibles, concentrates, extracts, topicals, and immature plants.1Oregon State Legislature. Oregon Code 475C – Cannabis Regulation The tax is technically levied on you, the consumer; the retailer just collects it and sends it to the state.
Local governments can add their own tax of up to 3% under ORS 475C.453, but only if voters approved the measure at a statewide general election.1Oregon State Legislature. Oregon Code 475C – Cannabis Regulation Where the full local tax is in place, you pay 20% total. Not every city and county has opted in, so the rate shifts with the storefront. Local jurisdictions cannot tax medical cardholders regardless of what their voters approved.
Medical Cardholders Pay Zero
If you hold a valid Oregon Medical Marijuana Program registry card, ORS 475C.678 exempts you from both the state tax and any local add-on.1Oregon State Legislature. Oregon Code 475C – Cannabis Regulation The exemption extends to designated primary caregivers purchasing for a registered patient.
Claiming the exemption is simple but strict: show your valid card at the time of purchase. Once the retailer verifies it, they’re legally barred from charging you the tax. There is no refund process, so if you leave the card at home and pay the tax, that money is gone.
Where the Tax Money Goes
Oregon splits marijuana tax revenue through a fixed formula published by the Department of Revenue:2Oregon Department of Revenue. Marijuana Tax Distributions
- 40% to the State School Fund for K-12 education
- 20% to the Mental Health, Alcoholism, and Drug Services Account
- 20% to cities and counties that allow marijuana businesses within their boundaries
- 15% to the Oregon State Police Account
- 5% to the Oregon Health Authority for drug treatment and prevention
Schools get the biggest single share. The 20% local allocation only flows to jurisdictions that actually permit licensed retailers, so communities that banned cannabis businesses get none of it.
If You Run a Dispensary: Collecting and Remitting
Licensed retailers collect both the state and any local tax, then remit to the Oregon Department of Revenue. Retailers keep 2% of what they collect as an administrative allowance.1Oregon State Legislature. Oregon Code 475C – Cannabis Regulation On $300,000 in monthly sales, a retailer would owe $49,980 after the 2% allowance rather than the full $51,000.
Payments follow a monthly deposit schedule, not a single quarterly lump sum. Three deposits are due each calendar quarter: by the last day of the second month, by the last day of the third month, and by the last day of the month after the quarter closes.3Oregon Secretary of State. Oregon Administrative Rules 150-475-2010 – Marijuana Tax Due Dates No sales in a given month means no deposit for that month.
Filing Returns and Making Payments
The quarterly cannabis tax return is filed electronically through the Department of Revenue’s Revenue Online portal.4Oregon Department of Revenue. Marijuana Returns must separate recreational sales from tax-exempt medical sales and report the exact tax collected. Quarterly returns are due by the last day of the month after each quarter closes: April 30, July 31, October 31, and January 31.
Retailers can pay by electronic funds transfer or mail a check or money order with a payment voucher.5Oregon Department of Revenue. Make a Payment Cash payments, common in an industry with limited banking access, must be made in person at the Department of Revenue’s Salem headquarters. You must call at least 48 hours ahead to schedule an appointment, and showing up late or without one may mean the payment isn’t processed that day.4Oregon Department of Revenue. Marijuana Appointments fill fastest near month-end.
Penalties and Interest for Late Payment
Missing a deadline triggers both a penalty and interest. Oregon’s administrative rules impose a 5% delinquency penalty on unpaid tax if the payment misses its original due date. Interest accrues immediately on the outstanding balance.
For 2026, the Department of Revenue’s Tier One interest rate is 8% annually, roughly 0.022% per day. If the balance stays unpaid past 60 days after certain triggering events, the rate climbs to Tier Two at 12% annually.6Oregon Department of Revenue. Annual Interest Rate Update for 2026 A short delay compounds quickly once penalty and interest stack.
Federal Section 280E and Oregon’s Decoupling
The state excise is only half of what cannabis businesses deal with. On the federal side, Internal Revenue Code Section 280E blocks any business trafficking in Schedule I or II controlled substances from deducting ordinary expenses like rent, payroll, utilities, and advertising.7Office of the Law Revision Counsel. 26 USC 280E – Expenditures in Connection With the Illegal Sale of Drugs Marijuana remains Schedule I federally, so every licensed Oregon retailer, grower, and processor is hit. The only deduction allowed is cost of goods sold, which pushes the effective federal rate well above a normal business.8Congress.gov. The Application of Internal Revenue Code Section 280E
Oregon decoupled from 280E in 2016. Under ORS 316.680, cannabis businesses can subtract from Oregon taxable income any federal deduction that would have been allowed but for Section 280E. In practice, your Oregon state income tax bill reflects normal business deductions even when your federal bill does not. Not every legal-cannabis state offers this, and it meaningfully changes the total tax burden projection.