UPDATE: It was initially reported by numerous sources that a letter sent by Sen. Jeanne Kohl-Welles to the Department of Revenue asking whether marijuana is taxable or not led to the state’s latest tax efforts. The Senator disputes this and, in fact, she appears to be right. DOR spokesman Mike Gowrylow says the new tax efforts were started after several dispensaries asked about the drug’s tax status, then complained when not all their competitors were charging sales tax.Yesterday we established that Washington is living in quite the state of denial with its new insistence on taxing medical marijuana dispensaries, while still somehow considering them illegal. According to many in medical marijuana circles, the new tax efforts were a direct result of 36th District Sen. Jeanne Kohl-Welles sending a letter to Washington’s Department of Revenue asking whether medical marijuana is taxable or not (it is now, thanks Senator). It’s an interesting point, especially considering that if Kohl-Welles’ massive new marijuana legislation that she plans to introduce in the next few weeks passes, medical pot dispensaries will officially be exempt from state sales taxes and the circle will again be complete.Kohl-Welles tells Seattle Weekly that the tax exemption part of her upcoming bill is only a small part of the legislation, but that it’s crucial, nonetheless. “This Department of Revenue effort is really bizarre, it’s inappropriate,” she says. “How can they expect dispensaries that are operating, really, in a way, unlawfully, to say ‘here I am, I’ll pay this sales tax and, by the way, that identifies me and makes it such that law enforcement can come after me.'”For dispensary owners like Muraco Kyashna-tocha, the founder of the Green Buddha Patient Network in Seattle, being taxed is somewhat of a blessing and a curse. On the one hand, paying taxes means one of the final steps in being labeled a fully authorized, legitimate business. On the other hand, it involves paying taxes, which, let’s be honest, no one really enjoys.”I’m all for it if it makes us seem like a more legitimate business,” Kyashna-tocha tells Seattle Weekly. “It would be a regressive tax and that’s unfortunate, but it would make people more accepting of our practice, I think. An actual tax exemption would be a good step forward too.” Kohl-Welles says other aspects of the bill, besides the sales tax exemption, include stronger protections for marijuana providers and dispensaries against prosecution, protections against workplace discrimination based on medical pot use and protections for medical marijuana using parents. There’s also a section that would allow people to grow medical pot in community gardens.”It’s really a huge piece of legislation and quite complicated,” she assures. “It’s something I’ve been working on for a very long time.”She wouldn’t say how confident she is of its passage, but said she hoped to introduce it by mid January. In the meantime, one can expect the state to squeeze all the taxes it can out of dispensaries while they still can.