New Cannabis Businesses Face Tax Responsibilities

Beginning Jan. 1, 2018, the cannabis cultivation tax and excise tax will take effect. Cannabis businesses need to be aware of the new tax rates and how they apply to their business activities, said officials from the California Department of Tax and Fee Administration.

 

Cultivation Tax: Cultivators are responsible for paying the cultivation tax on all harvested cannabis entering the commercial market to the distributor (or to the manufacturer if that is where the first transfer or sale of unprocessed cannabis takes place). Manufacturers who collect the cultivation tax are required to pay the tax to the distributor. The distributor reports and pays the cultivation tax to the California Department of Tax and Fee Administration (CDTFA). The current cultivation tax rates are $9.25 per dry-weight ounce of cannabis flowers, and $2.75 per dry-weight ounce of cannabis leaves.

 

Excise Tax: Both cannabis and cannabis products are

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