Change in Excise Tax Obligation for Sales of Cannabis

Beginning January 1, 2023, cannabis retailers will be responsible for collecting and paying the cannabis excise tax to the California Department of Tax and Fee Administration (CDTFA).   The new application of tax is a departure from the previous application of tax in which the distributor was responsible for remitting both the cultivator and the distributor excise taxes.  Under the new law, a 15% cannabis excise tax will be applied to the gross receipts of the retail sale of cannabis and retailers will now be required to obtain a cannabis retailer’s license which will create a requirement for them to report […]

Southern California Medical Marijuana Dispensaries be on the Look-out

In recent months, our firm has seen a significant increase in the Board of Equalization’s (BOE) audit activities as they relate to medical marijuana dispensaries, and even more specifically as they pertain to the Los Angeles area.  The BOE audit staff has been targeting the local dispensaries in its sales tax audit activities and has been performing audits that are not being completed in accordance with the BOE’s established audit procedures.  The result of the BOE’s renewed focus on medical marijuana dispensaries, in conjunction with their unorthodox and inappropriate audit procedures, is leaving many tax compliant marijuana dispensaries with undeserved, […]

Medical Marijuana Regulation & Safety Act (MMRSA)

In September 2015, the California state Legislature and Governor Brown passed AB 266, AB 243, and SB 643 which laid the initial groundwork for state and local government oversight and administration of medical marijuana.  The three bills, commonly referred to as the Medical Marijuana Regulation & Safety Act (MMRSA), grant various levels of authority to the California Department of Food and Agriculture, California Department of Consumer Affairs, the California Department of Public Health, and the California State Board of Equalization (BOE).

On February 10, 2016, Board Member Fiona Ma hosted a stakeholder panel […]

Medicinal Marijuana: Taxable or Exempt? – At SalesTaxSupport.com

logo-v2This month, James R. Dumler, a senior sales tax specialist at McClellan Davis and featured contributor at Sales Tax Support writes about sales tax on medical and recreational marijuana. Sales Tax Support publishes articles written by experts and thought leaders in the specialized field of sales and use tax with small and medium sized business owners in mind.

Visit salestaxsupport.com to read James’informative article “Medicinal Marijuana: Taxable or Exempt?”

Questionable Tax Audit Procedures for California Marijuana Dispensaries

Marijuana dispensaries have become one of the primary targets for sales and use tax audits performed by the State Board of Equalization. The historical treatment of marijuana as an illegal drug (which is still the case at the federal level), auditors’ underlying political beliefs, and the unusual audit methodologies employed for marijuana dispensaries, can often result in overstated liabilities. A general awareness of the audit procedures and the issues to look out for can help marijuana dispensaries avoid unnecessary and lengthy disputes with the Board of Equalization audit staff. This article addresses some of the intricacies and pitfalls of observation […]