Treez will support the CA tax change coming 1/1/2023 in the following ways:
- Distributors and microbusinesses authorized to distribute cannabis or cannabis products will stop collecting the 15 percent cannabis excise tax from cannabis retailers.
Treez will copy all arm's length type distributor profiles and recreate them as non-arm's length to avoid excise tax calculation on invoices.
On the night of 12/31/22, all arm’s length distributors will be deactivated and recreated as non-arm’s length distributors. The new non-arm’s length distributor will retain all the same details except for the total outstanding balance because historical invoices will still be associated with the original arm’s length distributor profile.
Deactivated distributors cannot be added to new draft invoices ensuring that only active non-arm’s length distributors will be used going forward on January 1. Deactivated distributors can be referenced in Purchasing > Distributors and filtering for ‘Inactive’.
- Cannabis retailers will be responsible for collecting the 15 percent cannabis excise tax from their customers based on the gross receipts from the retail sale of cannabis or cannabis products. Gross receipts include the selling price of cannabis or cannabis products (after discount), and all charges related to the sale, such as a delivery fee and any local cannabis taxes listed separately on the invoice or receipt.
Configurations > Config Page > Taxes > Point of Sale Tax Setup
ONLY for retailers set up with Excise Tax w/ Rate = *Automated on 12/31/22 (see image below), Treez will update this tax to a new custom tax labeled ‘CA Excise Tax’ w/ Rate = 15% on the night of 12/31/22.
All retailers should discuss with a tax professional about how best to configure their POS tax setup going forward for 2023. Treez will NOT make any other changes to the tax configuration including updating compounding tax layers or adding a 15% excise tax if there is no *Automated excise tax that already exists in the Tax Setup.
- Claim a credit on the return for any excise tax paid to a distributor for cannabis or cannabis products purchased before January 1, 2023, for cannabis or cannabis products sold at retail on or after January 1, 2023.
Retailers can refer to historical sales and tax reports in Treez to verify that inventory was purchased from arm’s length distributors and the amount of excise tax paid on the invoice.