⚠️ Important Disclaimer
Treez is providing this information for general informational purposes only.
Treez does not provide legal, tax, or accounting advice, and this notice should not be relied upon as such. Each retailer is solely responsible for understanding and fulfilling their own tax obligations and ensuring compliance with CDTFA regulations.
Effective October 2, 2025, the California Department of Tax and Fee Administration (CDTFA) formally adopted Regulation 3802, which clarifies what counts as “gross receipts” for purposes of calculating the 15% cannabis excise tax under Revenue and Taxation Code §34011.2.
👉 View the official certification here:https://cdtfa.ca.gov/taxes-and-fees/Reg3802-Certification.htm
🔍 What This Means
Under Regulation 3802, CDTFA clarified that “gross receipts” include nearly all amounts a purchaser is required to pay as part of a cannabis sale — not just the listed product price.
This includes:
Credit card or payment processing fees charged to the customer
Handling or service fees tied to the sale
Packaging, jars, bags, or other items the customer must buy to complete a purchase
However, optional add-on items — like lighters, pipes, or vape devices sold separately — may be excluded from gross receipts if:
The customer is not required to purchase them,
The retailer maintains documentation showing they are optional, and
The amount charged is reasonable and not inflated.
⚖️ Why CDTFA Issued This Update
This regulation finalizes CDTFA’s prior emergency guidance and is designed to eliminate ambiguity around what is included in the excise tax base. The agency’s goal is to ensure consistent tax reporting and reduce discrepancies in how retailers apply the 15% excise tax.
💡 Action for Retailers
Treez recommends that you:
Review your receipts and POS configurations to confirm all mandatory fees or packaging costs are properly treated as taxable under California excise tax rules.
Consult your tax advisor or CPA for guidance on how this regulation impacts your specific tax filings or compliance obligations.
Maintain clear records demonstrating which items are optional and how charges are calculated, as CDTFA may request supporting documentation.
📚 Additional Resources
CDTFA Reregulation 3902: https://cdtfa.ca.gov/lawguides/vol3/ctr/ctr-reg3802.html
CDTFA Regulation 3802 Certification: https://cdtfa.ca.gov/taxes-and-fees/Reg3802-Certification.htm
CDTFA Cannabis Tax Information: https://www.cdtfa.ca.gov/industry/cannabis.htm