CA Tax & Licensing Overview for Cannabis Businesses – Tips from a California Tax Attorney
This video only covers California law, please remember that cannabis is still a Schedule I drug under the Federal Controlled Substances Act and wholly illegal, even for medical use. Anyone interested in this industry should make sure they are fully informed of the Federal laws related to cannabis. Contact the Law Offices of Christina Weed for more information:
Beginning January 2018, several new cannabis taxes and licenses went into effect. This video covers a summary of those changes.
Beginning January 1, 2018, two new cannabis taxes are in effect:
• A 15 percent excise tax is imposed upon purchasers of cannabis and cannabis products. Retailers are required to collect the excise tax from the purchaser and pay it to the cannabis distributor.
• A tax on the cultivation of cannabis that enters the commercial market is imposed upon cultivators. Cultivators are required to pay the cultivation tax to either a distributor or a manufacturer depending upon the nature of the transaction. The cultivation tax rates are:
• $9.25 per dry-weight ounce of cannabis flowers, and
• $2.75 per dry-weight ounce of cannabis leaves.
• Additional categories and rates may be specified at a later date.
All cannabis businesses making sales are required to:
• Register online with the CDTFA for a seller’s permit.
• File sales and use tax returns electronically and pay any sales and use tax to the CDTFA. Even if none of your sales are subject to sales tax, you are still required to file a return and report your activities on your return to the CDTFA.
In addition, if you are a cannabis distributor, the following requirements apply to you:
• Prior to January 1, 2018, register online with the CDTFA for a cannabis tax permit. (Registration will be available in November 2017.)
• Beginning January 1, 2018, collect the excise tax from retailers you supply.
• Beginning January 1, 2018, collect the cultivation tax from cultivators or manufacturers that send or transfer cannabis and cannabis products to you.
• File both your cannabis tax and sales and use tax returns electronically and pay any tax amounts due to the CDTFA.
If you have any questions, please feel free to contact the Law Offices of Christina Weed, PC to schedule an appointment.