Rise shows compliance trend growing
The California Department of Tax and Fee Administration (CDTFA) recently released revenue numbers for cannabis sales for the second quarter of 2018. Tax revenue from the cannabis industry totaled $74,240,257 from April 1, 2018, through June 30, 2018, which includes state cultivation, excise, and sales taxes. It does not include tax revenue collected by each jurisdiction.
California’s excise tax on cannabis generated $43,490,668 in revenue during the second quarter of calendar year 2018. The cultivation tax generated $4,482,119, and the sales tax generated $26,267,470 in revenue. Medicinal cannabis is exempt from sales tax if the purchaser holds a valid medical marijuana identification card.
The revenue from the first quarter of 2018 was $60.9 million, which included $32 million in excise tax, $1.6 million in cultivation tax, and $27.3 million in sales tax.
To better serve taxpayers, CDTFA has opened a new satellite location to accommodate tax and fee payers in and around Humboldt County, created a cannabis external tax advisory group, introduced a new pilot project in which the Statewide Compliance and Outreach Program (SCOP) teams visit known cannabis retailers to educate and assist them in complying with their tax obligations, and implemented improved procedures and security measures for financial transactions.
In November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act. Beginning on January 1, 2018, two new cannabis taxes went into effect: a cultivation tax on all harvested cannabis that enters the commercial market and a 15 percent excise tax on the purchase of cannabis and cannabis products. In addition, cannabis and cannabis products are subject to state and local sales tax at the time of retail sale.
To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.