California’s Cannabis Excise Tax Generated $68.3M For the 1st Quarter 2020 and the Cultivation Tax Generated $16.4M

Cannabis taxes taxedPress release from the California Department of Tax and Fee Administration:

The California Department of Tax and Fee Administration (CDTFA) reported revenue numbers [yesterday] for cannabis sales for the 1st Quarter of 2020. As of May 15, 2020, California’s cannabis excise tax generated $68.3 million in revenue reported on the 1st Quarter 2020 returns due by April 30, 2020, and the cultivation tax generated $16.4 million.

Due to the COVID-19 pandemic, 1st Quarter 2020 is a unique reporting period since approximately half of the taxpayers normally reporting have yet to file a return with the CDTFA. Revisions to 1st Quarter 2020 data are expected in mid-August after the 2nd Quarter return filing due date of July 31. Additional information on the relief offered due to the COVID-19 pandemic can be found at COVID-19 State of Emergency.

Sales tax from cannabis businesses totaled $50.2 million in revenue for the same period. Sales tax applies to sales of cannabis, cannabis products, and other tangible personal property. Certain retail sales of medicinal cannabis are exempt from sales and use taxes when the purchaser provides at the time of purchase a valid Medical Marijuana Identification Card issued by the California Department of Public Health and a valid government-issued identification card.

Total tax revenue reported by the cannabis industry is $134.9 million for 1st Quarter returns due by April 30, 2020. This does not include tax revenue collected by each jurisdiction. Previously reported revenue for 4th Quarter 2019 returns was revised to $177.3 million, which included $85.9 million in cannabis excise tax, $24.1 million in cultivation tax, and $67.3 million in sales tax. Revisions to quarterly data are the result of amended and late returns, and other tax return adjustments.

Since January 2018, total program revenue to date is $1.17 billion, which includes $569.8 million in cannabis excise tax, $140.2 million in cultivation tax, and $456.9 million in sales tax.

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 cannabis excise tax upon purchasers of cannabis and cannabis products. In addition, retail sales of cannabis and cannabis products are subject to state and local sales tax. To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.

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Mike
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Mike
3 years ago

Wow, now the government can do so much good with the money. Firefighters are short staffed unemployment has run out, pensions are in danger, im just glad that now some of our problems are now going to be solved.

Jc
Guest
Jc
3 years ago
Reply to  Mike

No it’s not we live in a comifornia. It’s over taxed over regulated. Those monies will go to bailing out a mismanaged California and a horribly corrupt Humboldt county . We pay more for everything here in comifornia, fuel, food, everything. The rest of the country lives in the USA.

michael schwinn
Guest
michael schwinn
3 years ago
Reply to  Mike

SOUNDS LIKE YOU ARE PART OF THE LAW ENFORCEMENT, OF OVER TAXATION ON CANIBISS, ILL NEVER PAY THE TAXTION ,, LONG LIVE THE UNDERGROUND MARKET , AND FUCK THE GOVERNMENT ! they are the pirates here, and fuckum!

Lurch
Guest
Lurch
3 years ago

How many times can you tax the same product? Farmers are taxed by the county and state for square footage and license, cultivation tax applied for bulk sales.. then same product has sales and excise tax applied, then income tax there at the end… taxed to death.

JB
Guest
JB
3 years ago
Reply to  Lurch

And it’s even worse than that …

Ignoring the license ‘application fees’ (applied each year) and then the license fees themselves (on both state and local levels), you have not only the farmer’s cultivation tax (both state and local), but depending on the location, there’s often a processing tax, manufacturing tax (extraction), infusion tax, testing tax and of course the always present distribution tax (even if just for transportation) — and that’s BEFORE you get the sale and excise taxes.

Survive that, and thanks to 280E, you get to pay income taxes on money you actually lost.

Willow Creeker
Guest
Willow Creeker
3 years ago
Reply to  Lurch

That’s pretty normal in any value added product, it gets taxed along the way. Wine for example. I know it’s hard to get your mind around it after never paying taxes. Anyone who voted for 64 has no room to bitch. You asked for it.

Heads up willow creeker-
Guest
Heads up willow creeker-
3 years ago
Reply to  Willow Creeker

Ive been told by folks in the wine industry that they cannot get through the cannabis permitting process because it is so confusing and expensive. They are shocked at how messed up the permit process is for cannabis when compared to a similar product. The cannabis and wine industry is nowhere near comparable though. Just look at the enforcement. If you grow grapes for wine without a permit your looking at a $100 one time fine for the first offense. In Humboldt you get 10k DAILY fines (up to $900k) even without cannabis, for just having greenhouses in the past, or for thinking you have a permit and accidentally missing a deadline from one of ~20 agencies you have to work with, or even due to county incompetence. Its easy to fall out of compliance and all across the county people with permits are getting cut and abated.

michael schwinn
Guest
michael schwinn
3 years ago
Reply to  Lurch

grow your own , and fuck the government to DEATH !

Rod Gass
Guest
Rod Gass
3 years ago

I believe that each of us are learning some dire facts concerning our $64.

Is there a limit to taxation?
Is it wrong to refuse to pay the excessive taxes?
Why does government deserve even 2 cents?

No, the longer that $64 remains in effect, the clearer the corrupt intent is displayed.

Care free
Guest
Care free
3 years ago

Wait you have to pay taxes on losses 😂😂😂. I see now it’s the schedule 1 drug your growing😂.
——-
https://www.eisneramper.com/cannabis-industry-deductions-denied-0120/

In 1982, Congress enacted Section 280E. With the exception of cost of goods sold (“COGS”), Section 280E denies federal tax deductions and credits from gross income if a taxpayer is engaged in the business of the manufacture, distribution or sale of certain controlled substances classified as a Schedule I or Schedule II pursuant to the 1970 Controlled Substances Act.

IRC Section 280E states: “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act) that are prohibited by federal law or the law of any state in which such trade or business is conducted.”

Cannabis is considered a Schedule I drug. Therefore, any sales activity is considered trafficking under federal law. IRC Section 280E prevents cannabis businesses from enjoying the benefit of otherwise ordinary business deductions, dramatically increasing their effective tax rate.

yoyoyo
Guest
yoyoyo
3 years ago
Reply to  Care free

This does not apply to people who only cultivate. This only applies to distribution, manufacturing and retail.

JB
Guest
JB
3 years ago
Reply to  yoyoyo

280E applies to anyone involved in the cannabis business – full stop.

What you may be referring to is that fact that COGS for a cultivator includes most (but not all) cultivation expenses whereas at the distribution and retail level, it’s almost the opposite.

ILoveplants
Guest
ILoveplants
3 years ago

Ah this explains why the black market is so successful right now

Black Rifles Matter
Guest
Black Rifles Matter
3 years ago
Reply to  ILoveplants

Yup. Prices are high and there is not much around. It’s definitely a sellers market.

michael schwinn
Guest
michael schwinn
3 years ago
Reply to  ILoveplants

VIVA BLACK MARKET IN CALI …….

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[…] taxes, and $16.4 million in cultivation taxes, the state Department of Tax Fee and Administration announced […]

Legallettuce
Guest
Legallettuce
3 years ago

500 mil a year cut still to much in my opinion. However, they were projecting a few billion initially so I will consider it a minor victory overall. As always, Fuck Legal.

Lady
Guest
Lady
3 years ago

Black markets matter

Swine
Guest
Swine
3 years ago
Reply to  Lady

Underground markets lady. The black market is where you trade people qms buy tigers.

Money for nothing?
Guest
Money for nothing?
3 years ago

As the saying goes. “Follow the money”. But in this case there isn’t a trail. Where does the money go?

Jeffersonian
Guest
Jeffersonian
3 years ago

Rest assured the govt. will waste this money.

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[…] comunicado de prensa del Departamento de Administración Tributaria y Tasas de California (CDTFA) informó esta semana […]

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[…] taxes, and $16.4 million in cultivation taxes, the state Department of Tax Fee and Administration announced […]

Guest
Guest
Guest
3 years ago

Any Journalist care to get to work & do investigative journalism & publish a story on where ALL the money is getting spent, it is tax $… of course not. That’s enough $ to have grant programs & pay for permits.