SellTreez: CA ONLY - Excise Tax Changes Coming 1/1/2023

Please note: CA Excise Tax Changes are coming January 1, 2023.  Click on the links below to view what the State of California has posted about these upcoming changes: 

• Cannabis Special Notice for the State of California
• Tax Guide for Cannabis Business for the State of California

Preview of:

Cannabis Retailer Excise Tax– 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). A 15% cannabis excise tax will be applied to gross receipts of cannabis or cannabis products in a retail sale. All cannabis retailers and microbusinesses authorized to sell cannabis or cannabis products at retail will be required to register for a Cannabis Retailer Excise Tax (CRE) permit with us and must begin filing their CRE returns for filing periods starting January 1, 2023. CDTFA will automatically register licensed retailers based on the information received from the Department of Cannabis Control prior to January 1, 2023. If you are a cannabis retailer or microbusiness that needs a CRE account with us, and you were not automatically registered with us or acquired your DCC licensee after January 1, 2023, you can register with us through our online services beginning January 1, 2023.

Of Note:

Starting January 1, 2023, cannabis retailers will:
• Need a cannabis retailer excise tax permit from CDTFA.
• Retailers, including microbusiness retailers, that are licensed with the Department of Cannabis Control
(DCC) will be automatically registered.
• 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.
• File cannabis retailer excise tax returns online with CDTFA and pay the cannabis excise tax due.
• 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.
• If already approved for a license fee waiver with the DCC, licensees can apply to CDTFA to retain Vendor
Compensation equal to 20 percent of cannabis tax due.
• Additional information will be provided on how a cannabis retailer can apply for Vendor Compensation and how to retain 20 percent of the cannabis excise tax due

Other Resources: 

SellTreez: How Do I Ensure I Am Not Double Paying Excise Tax with the New Changes Coming?