Non-sales & use taxes imposed on cannabis

Alabama

There is imposed a tax on the gross proceeds of the sales of medical cannabis when sold at retail in Alabama at the rate of 9% of the gross proceeds of the sales. In addition, an illegal drug tax is imposed, which is an excise tax on illegal possession, distribution, sales, use, and other transactions involving certain drugs or controlled substances. The tax is imposed at the following rates: (i) on each gram of marijuana, or each portion of a gram, $3.50; (ii) on each gram of controlled substance, or portion of a gram, $200; or (iii) on each 50 dosage units of a controlled substance that is not sold by weight, or portion thereof, $2,000.

• Comment: We recommend you reference cited authority for more information.
• Citation: Alabama Code §40-17A-1 et seq., 2021 General Summary of State Taxes 
• CCH Explanation: Alabama 60-520

Alaska

There is no state excise tax on medical marijuana. State excise tax on recreational marijuana: mature bud -- $50 an ounce; immature bud -- $25 an ounce; abnormal bud -- $25 an ounce; remainder of the plant -- $15 an ounce; and clones -$1 per plant. Local taxes may apply in addition to state taxes.

• Comment: We recommend you reference cited authority for more information.
• Citation: Alaska Stat. §43.61.010  
• CCH Explanation: Alaska 60-520

Arizona

Adult use marijuana retail sales are subject to a 16% state marijuana excise tax (MET).

• Comment: We recommend you reference cited authority for more information.
• Citation: Ariz. Rev. Stat. §42-5452 
• CCH Explanation: Arizona 60-520

Arkansas

A 4% medical marijuana special privilege tax is imposed on gross receipts from sales of usable marijuana by a cultivation facility, dispensary, or other marijuana business. The 4% special privilege tax is scheduled to expire on July 1, 2023.

• Comment: We recommend you reference cited authority for more information.
• Citation: Ark. Code. Ann. §26-57-1504
• CCH Explanation: Arkansas 60-520

California

A 15% excise tax is imposed upon purchasers of all marijuana and marijuana products.

• Comment: We recommend you reference cited authority for more information.
• Citation: Cal. Rev. & Tax. Code §34011, Cal. Rev. & Tax. Code §34012
• CCH Explanation: California 60-520

Colorado

Retail marijuana is subject to a 15% excise tax on the Average Market Rate (AMR) or contract price of retail marijuana. The AMR is adjusted quarterly.

• Comment: We recommend you reference cited authority for more information.
• Citation: Colo. Rev. Stat. §39-28.8-302
• CCH Explanation: Colorado 60-520

Connecticut

Cannabis is subject to the marijuana and controlled substances tax at a rate of $3.50 per gram.

• Comment: We recommend you reference cited authority for more information.
• Citation: Conn. Gen. Stat. §12-407(a)(12) and (a)(15)
• CCH Explanation: Connecticut 60-520

Delaware

N/A

District of Columbia

There is no excise tax on medical marijuana. DC legalized the possession and use (but not sale) of adult use marijuana but Congress prevents the city from taxing sales.

• Comment: None
• Citation: N/A

Florida

N/A

Georgia

N/A

Hawaii

Sales of medical cannabis are generally subject to Hawaii general excise tax. Medical cannabis and manufactured medical cannabis products are not exempt as "prescription drugs."

• Comment: We recommend you reference cited authority for more information.
• Citation: Haw Rev Stat §237-24.3(6)
• CCH Explanation: Hawaii 60-520

Idaho

An illegal drug excise tax is imposed on all illegal controlled substances possessed. The amount of the tax is: (i) $3.50 per gram or portion of a gram of marijuana; (ii) $775 per growing marijuana plant; (iii) $200 per gram or portion thereof of a controlled substance; or (iv) $2,000 per 50 dosage units or portion thereof of a controlled substance that is not sold by weight.

• Comment: We recommend you reference cited authority for more information.
• Citation: Idaho Code §62-4203  
• CCH Explanation: Idaho 60-520

Illinois

The following taxes are due on sales of cannabis: cannabis cultivation privilege tax; medical cannabis cultivation privilege tax; and cannabis purchaser excise tax.

Cannabis cultivation privilege tax: The cannabis cultivation privilege tax is imposed upon the privilege of cultivating cannabis at the rate of 7% of the gross receipts from the first sale of adult use cannabis by a cultivator or craft grower.

Medical cannabis cultivation privilege tax: The medical cannabis cultivation privilege tax is imposed upon the privilege of cultivating medical cannabis at the rate of 7% of the sales price per ounce.

Cannabis purchaser excise tax: The cannabis purchaser excise tax is imposed on purchasers for the privilege of using cannabis, cannabis concentrate, and cannabis-infused products. The tax is imposed at the following rates: (i) 10% of taxable receipts from the sale of adult use cannabis, other than cannabis-infused products, sold with 35% THC or less; (ii) 25% of taxable receipts from the sale of adult use cannabis, other than cannabis infused products, sold with greater than 35% THC; and (iii) 20% of taxable receipts from the sale of adult use cannabis-infused products.

• Comment: We recommend you reference cited authority for more information.
• Citation: 410 ILCS 130/200, Informational Bulletin FY 2020-12, Informational Bulletin FY 2020-16, Cannabis Tax Frequently Asked Questions  
• CCH Explanation: Illinois 60-520

Indiana

While there is no sales and use tax levied on cannabis, it is subject to the controlled substance excise tax at the rate of $3.50 per gram.

• Comment: We recommend you reference cited authority for more information.
• Citation: Miscellaneous Tax Rates, Indiana Department of Revenue

Iowa

An excise tax is imposed on dealers at the following rates: $5 on each gram of processed marijuana, or each portion of a gram; $750 on each unprocessed marijuana plant.

• Comment: We recommend you reference cited authority for more information.
• Citation: Iowa Code §453B.7  
• CCH Explanation: Iowa 60-520

Kansas

N/A

• CCH Explanation: Kansas 60-520

Kentucky

N/A

Louisiana

N/A

Maine

Marijuana is subject to an excise tax at the following rates: $335 per pound of marijuana flower; $94 per pound of marijuana trim; $35 per mature marijuana plant; $1.50 per immature marijuana plant or seedling; and $0.30 per marijuana seed.

• Comment: We recommend you reference cited authority for more information.
• Citation: Me. Rev. Stat. Ann. tit.36, §4923  
• CCH Explanation: Maine 60-520

Maryland

N/A

Massachusetts

Adult use cannabis is subject to a 10.75% state excise tax. Medical use marijuana is not subject to this tax. Massachusetts also has a local optional excise tax up to 3%.

• Comment: We recommend you reference cited authority for more information.
• Citation: Sec. 2, Ch. 64N, G.L. Mass  
• CCH Explanation: Massachusetts 60-520

Michigan

A 10% excise tax is imposed on retail sales of recreational marijuana. Licensed marijuana facilities are subject to regulatory assessments that are set on an annual basis.

• Comment: We recommend you reference cited authority for more information.
• Citation: Mich. Comp. Laws §333.27963  
• CCH Explanation: Michigan 60-520

Minnesota

Marijuana is subject to the marijuana and controlled substances excise tax at the following rates: (1) on each gram of marijuana, or each portion of a gram, $3.50; (2) on each gram of controlled substance, or portion of a gram, $200; or (3) on each ten dosage units of a controlled substance that is not sold by weight, or portion thereof, $400. Also, any illegal marijuana or controlled substance must have a marijuana or controlled substance stamp on the package, purchased from the Department of Revenue.

• Comment: We recommend you reference cited authority for more information.
• Citation: Minn. Stat. §297D.08, Marijuana and Controlled Substance Tax
• CCH Explanation: Minnesota 60-520

Mississippi

Taxable

• Comment: Effective February 2, 2022, an excise tax is imposed on medical cannabis cultivation facilities. Sales and use taxes imposed on cannabis are covered in a separate Smart Chart.
• Citation: S.B. 2095, Laws 2022, effective February 2, 2022
• CCH Explanation: Mississippi 60-520

Missouri

A 4% medical marijuana tax is imposed on retail sales of marijuana for medical use that are sold at medical marijuana dispensary facilities in Missouri.

• Comment: We recommend you reference cited authority for more information
• Citation: Sec. 1, Article XVI, Missouri Constitution, Medical Marijuana, Missouri Department of Revenue
• CCH Explanation: Missouri 60-520

Montana

The excise tax on recreational marijuana, sales of which are planned to begin in 2022, will be 20%. Medical marijuana providers pay a 4% tax on gross marijuana and marijuana products sales. For an adult use dispensary, there is a 20% tax on the retail price of marijuana, marijuana products, and live marijuana plants.

• Comment: We recommend you reference cited authority for more information.
• Citation: Montana Code Ann. §15-64-102
• CCH Explanation: Montana 60-520

Nebraska

N/A

• CCH Explanation: Nebraska 60-520

Nevada

Adult use cannabis is subject to a 10% retail excise tax (medical cardholders are exempt from this tax). The first wholesale sale is subject to a 15% excise tax calculated at fair market value.

• Comment: We recommend you reference cited authority for more information.
• Citation: N.R.S. §372A.290
• CCH Explanation: Nevada 60-520

New Hampshire

N/A

New Jersey

A municipality may impose a local transfer tax on the sale of cannabis or cannabis items by a cannabis establishment that is located in the municipality. At the discretion of the municipality, the tax may be imposed on: receipts from the sale of cannabis by a cannabis cultivator to another cannabis cultivator; receipts from the sale of cannabis items from one cannabis establishment to another cannabis establishment; receipts from the retail sales of cannabis items by a cannabis retailer to retail consumers who are 21 years of age or older; or any combination thereof. Any local tax imposed must also include provisions for imposing a user tax, at the equivalent transfer tax rates, on any concurrent license holder operating more than one cannabis establishment. Each municipality can set its own rate(s) up to a certain percentage.

In addition, an optional social equity excise fee can be imposed by the Cannabis Regulatory Commission on personal use cultivation activities by licensed cannabis cultivators, including those alternative treatment centers deemed to be, and actually issued, cultivation licenses. Medical cannabis cultivation activities would not be subject to the excise fee.

• Comment: We recommend you reference cited authority for more information.
• Citation: New Jersey Constitution, Article IV, Sec. VII, Paragraph 13, TB-68, TB-104, Ch. 16 (A.B. 21), Laws 2021
• CCH Explanation: New Jersey 60-520

New Mexico

Recreational marijuana commercial sales will begin no later than April 1, 2022 and the rate of the cannabis excise tax will begin at 12%, gradually increasing to 18% July 1, 2030. Gross receipts tax will also apply. Medical marijuana is currently subject to gross receipts tax.

• Comment: We recommend you reference cited authority for more information.
• Citation: N.M. Stat. Ann. §7-42-3
• CCH Explanation: New Mexico 60-520

New York

A 7% excise tax is imposed on the gross receipts from the sale of medical cannabis by a registered organization to certified patients and designated caregivers.

In addition, sales of adult-use cannabis products are subject to a retail level excise tax of 13% (9% state excise tax and 4% local excise tax) and an excise tax imposed and collected by distributors based on potency measured by the milligrams of THC (the active ingredient in cannabis) in the product, with different rates depending on final product type. Such tax is imposed at the following rates: (i) cannabis flower: 0.5 cents per milligram of the amount of total THC, as reflected on the product label; (ii) concentrated cannabis: 0.8 cents per milligram of the amount of total THC, as reflected on the product label; and (iii) cannabis edible product: 3 cents per milligram of the amount of total THC, as reflected on the product label.

• Comment: We recommend you reference cited authority for more information.
• Citation: N.Y. Tax Law, §490, N.Y. Tax Law, §492, N.Y. Tax Law, §493, TSB-M-16(1)M
• CCH Explanation: New York 60-520

North Carolina

A controlled substances excise tax is imposed on cannabis possessed by dealers at the rate of $3.50 per gram.

• Comment: We recommend you reference cited authority for more information.
• Citation: N.C. Gen. Stat. §105-113.07
• CCH Explanation: North Carolina 60-520

North Dakota

N/A

Ohio

N/A

Oklahoma

A 7% gross receipts tax is imposed on sales of medical marijuana.

• Comment: We recommend you reference cited authority for more information.
• Citation: Okla. Admin. Code §710:65-19-216
• CCH Explanation: Oregon 60-520

Oregon

A 17% excise tax is imposed on retail sales of recreational marijuana items. The tax is collected from the consumer by the retailer.

• Comment: We recommend you reference cited authority for more information.
• Citation: Or. Rev. Stat. §475B.705  
• CCH Explanation: Arizona 60-520

Pennsylvania

Growers and processors pay a 5% excise tax on the gross receipts from the sale of medical marijuana to the dispensary.

• Comment: We recommend you reference cited authority for more information.
• Citation: 35 P.S. §10231.901
• CCH Explanation: Pennsylvania 60-520

Rhode Island

N/A

South Carolina

N/A

• CCH Explanation: South Carolina 60-520

South Dakota

Voters approved recreational marijuana in November 2020; however, it is currently being debated in the state courts. If the the law goes into effect a 15% marijuana excise tax will be imposed.

• Comment: None
• Citation: N/A

Tennessee

An unauthorized substances excise tax is imposed on cannabis at the rate of $3.50 per gram.

• Comment: We recommend you reference cited authority for more information.
• Citation: Tenn. Code. Ann. §67-4-2803  
• CCH Explanation: Tennessee 60-520

Texas

N/A

Utah

N/A

Vermont

Effective March 1, 2022, a cannabis excise tax of 14% of the sales price of each retail sale in Vermont is imposed on cannabis and cannabis products, including food or beverages.

• Comment: We recommend you reference cited authority for more information.
• Citation: Vt. Stat. Ann. tit 7, §7902 
• CCH Explanation: Vermont 60-520

Virginia

Effective January 1, 2024, an excise tax of 21% is imposed on the sale in Virginia of any retail marijuana, retail marijuana products, marijuana paraphernalia sold by a retail marijuana store, non-retail marijuana, and non-retail marijuana products. Any locality may by ordinance impose a 3% tax on any sale taxable under the state marijuana tax.

• Comment: We recommend you reference cited authority for more information.
• Citation: Va. Code Ann. §4.1-1003, 2021 Legislative Summary (P.D. 21-79), Unofficial Department Guidance  
• CCH Explanation: Virginia 60-520

Washington

A marijuana excise tax is collected by the Liquor and Cannabis Board at a rate of 37% of the selling price on each retail sale of marijuana concentrates, usable marijuana, and marijuana-infused products. The tax is paid by the buyer, is separate and in addition to general state and local sales and use taxes, and is not part of the total retail price to which general state and local sales and use taxes apply.

• Comment: We recommend you reference cited authority for more information.
• Citation: Wash. Rev. Code §69.50.535 
• CCH Explanation: Washington 60-520

West Virginia

While there is no excise tax levied on cannabis, it is subject to a privilege tax levied on every person who exercises the privilege of engaging or continuing in West Virginia in the business of a medical cannabis dispensary.

• Comment: We recommend you reference cited authority for more information.
• Citation: W. Va. Code §16A-9-1
• CCH Explanation: West Virginia 60-520

Wisconsin

Only certain cannabidiol (CBD) and hemp products are legal in the state and may be taxed as tangible personal property. Sales of tangible personal property are subject to Wisconsin sales and use tax unless an exemption applies.

• Comment: None
• Citation: N/A
• CCH Explanation: Wisconsin 60-520

Wyoming

N/A

• Comment: None
• Citation: N/A
• CCH Explanation: Wyoming 60-520

Source: Wolters Kluwer CCH® AnswerConnect, 2023
Permission for use granted.