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Privacy and local pot taxes


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The budding marijuana industry in Oregon has created a direct conflict with the state’s venerable Public Records Law.

Here’s the situation:

Marijuana retail stores pay taxes to the cities in which they’re located. In almost every case, when a city or other government entity receives money, whatever the source, it’s a matter of public record, and anybody is entitled to records showing who paid, and how much.

But that’s not the case with some smaller cities that have contracted with the Oregon Department of Revenue to handle local (as opposed to state) pot tax collections, said Joy Krawczyk, public information officer for the Department of Revenue.

Officials in those cities — including Sumpter and Huntington, the only two cities in Baker County with retail marijuana sales — have signed confidentiality agreements that prohibit them from disclosing how much the cities have received from their local 3-percent pot taxes.

The purpose of these agreements is to protect the financial privacy of marijuana stores, Krawczyk said. In towns with a small number of stores, a person could in theory use the tax payment to the city to extrapolate individual stores’ sales volume.

“Our priority is to do everything we can to prevent inadvertent disclosure of confidential taxpayer information,” Krawczyk said.

On the one hand, we understand the concern.

After all, citizens can’t go to City Hall and gather public records that make it possible to estimate the income from, say, restaurants or fuel stations.

But we’re more concerned about the prospect of cities collecting taxes, and spending them on residents’ behalf, without residents knowing who paid the money to the city, and how much they paid.

This betrays not only the Public Records Law but the fundamental principles of open government.

Moreover, the secrecy prevents the public from gauging the accuracy of store owners’ statements about the taxes they pay.

Steve Meland, who owns the Hotbox Farms retail marijuana store in Huntington, told us he expects he will pay at least $100,000 in local taxes this year.

But without Huntington’s tax records it’s impossible to rate the accuracy of Meland’s statement.

It seems likely that these confidentiality agreements will run afoul of multiple other laws, including those governing the content of annual financial audits that all government agencies are required to perform.

This is new territory Oregon, to be sure.

But we urge state officials to reconsider these confidentiality agreements. However valid the concerns might be about privacy, they shouldn’t supersede the public’s right to know how much money, and from which sources, is being spent by their elected representatives.