Source: Wolters Kluwer CCH® AnswerConnect, 2022
Permission for use granted.
Permission for use granted.
Fiscaliteit & Accounting10 januari, 2023|Bijgewerktjanuari 10, 2023
State by state sales tax on cannabis
This chart indicates whether cannabis sold legally for medical or recreational use is subject to sales tax.
| STATE | COMMENT | CITATION |
| Alabama Cannabis: Taxable |
Effective January 1, 2022, 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, Alabama does have an illegal drug tax, which is an excise tax on illegal possession, distribution, sales, use, and other transactions involving certain drugs or controlled substances. We recommend you contact Alabama Department of Revenue for more information. |
Ala. Code §20-2A-80 |
| Arizona Cannabis: Taxable |
Medical cannabis is subject to general state sales tax, as well as any applicable city or county taxes.
Adult use (non-medical) cannabis is subject to state and local general sales and use tax. Additionally, it is subject to a 16% state cannabis excise tax. We recommend you reference cited authority for more information. |
Ariz. Rev. Stat. §42-5010 |
| Arkansas Cannabis: See comment |
A sale of usable cannabis is subject to state and local sales taxes at the same rate as other tangible personal property.
We recommend you reference cited authority for more information. |
Ark. Code Ann. §26-57-1504 |
| California Cannabis: Taxable |
Sales and use tax applies to retail sales of cannabis and cannabis products.
A sales and use tax exemption applies to retail sales of medical cannabis, medical cannabis concentrate, edible medical cannabis products, and topical cannabis, as defined. We recommend you reference cited authority for more information. |
Cal. Rev. & Tax. Code §34011, Cal. Rev. & Tax. Code §34012, Special Notice L-481, California State Board of Equalization, October 2016, Tax Guide for Medical Cannabis Businesses, California State Board of Equalization, November 2016 |
| Colorado Cannabis: Taxable |
Medical cannabis is subject to general sales tax.
Retail (recreational) cannabis and cannabis infused products are subject to a 15% state retail marijuana sales tax, but exempt from the general sales tax. It is also subject to any applicable local option retail tax.
Retail cannabis is also subject to a 15% excise tax on the Average Market Rate or contract price of retail cannabis. We recommend you reference cited authority for more information. |
Colo. Rev. Stat. §39-26-104(1)(a), Colo. Rev. Stat. § 39-28.8-202 |
| Connecticut Cannabis: Not Taxable |
Effective July 1, 2021, a state tax is imposed on retail sales of cannabis, cannabis plant material, and cannabis edible products by a cannabis or hybrid retailer or micro-cultivator, with certain exceptions. The tax rate is based on the product’s type and total THC reflected on its label as follows:
In addition, a 3% municipal sales tax is imposed on the gross receipts from the sale of cannabis by a cannabis or hybrid retailer or micro-cultivator that must be administered in accordance with the state sales and use tax law. We recommend you reference cited authority for more information. |
|
| District of Columbia Cannabis: Not Taxable |
Federal law prohibits the sale of cannabis.
We recommend you reference cited authority for more information. |
D.C. Code Ann. §47-2002(a)(7) |
| Florida Cannabis: Exempt |
Federal law prohibits the sale of cannabis.
We recommend you reference cited authority for more information. |
D.C. Code Ann. §47-2002(a)(7) |
| Georgia Cannabis: N/A |
N/A | |
| Hawaii Cannabis: Taxable |
Exemption for prescription drugs does not apply to medical cannabis or manufactured medical cannabis product.
We recommend you reference cited authority for more information. |
Haw. Rev. Stat. §237-24.3(6) |
| Idaho Cannabis: N/A |
However, Idaho has an illegal drug stamp excise tax.
We recommend you reference cited authority for more information. |
Idaho Code §63-4203, Idaho Code §63-4205 |
| Illinois Cannabis: Taxable |
Both medical cannabis and adult use cannabis are subject to the retailers’ occupation tax.
Medical cannabis is subject to state and local retailers’ occupation taxes at the same rate as other qualifying drugs, i.e., 1% state rate and is generally exempt from locally imposed retailers’ occupation taxes (except for Regional Transportation Authority and Metro-East Transit District retailers’ occupation taxes).
Adult use cannabis is subject to the state retailers’ occupation tax as well as local retailers’ occupation taxes in the same manner as other general merchandise. In addition, counties and municipalities may impose a local cannabis retailers’ occupation tax on retail sales of cannabis, other than medical cannabis, at specified rates.
Further, the following other types of taxes are due on sales of cannabis: cannabis cultivation privilege tax; medical cannabis cultivation privilege tax; and cannabis purchaser excise tax.
We recommend you reference cited authority for more information. |
35 ILCS 120/2-10, Informational Bulletin FY 2020-12, Informational Bulletin FY 2020-16, Cannabis Tax Frequently Asked Questions |
| Indiana Cannabis: N/A |
N/A | |
| Iowa Cannabis: Taxable |
Medical marijuana (CBD oil with less than 3% THC) is subject to state sales tax. | |
| Kansas Cannabis: N/A |
N/A | |
| Kentucky Cannabis: N/A |
N/A | |
| Louisiana Cannabis: N/A |
Louisiana imposes an excise tax on cannabis and controlled dangerous substances and industrial hemp-derived CBD products. | |
| Maine Cannabis: Taxable |
Medical cannabis is subject to sales tax at the state rate. Retail sales of adult use recreational cannabis, permissible as of May 2, 2018, will be subject to a special tax rate of 10%.
We recommend you reference cited authority for more information. |
Me. Rev. Stat. Ann. tit. 36, §1760(5) |
| Maryland Cannabis: Exempt |
We recommend you reference cited authority for more information. | Md. Code Regs. 03.06.01.09 |
| Massachusetts Cannabis: Taxable |
Retail cannabis sales are subject to the 6.25% state sales tax, 10.75% state excise tax, and up to 3% local option tax.
Medical cannabis sold to a qualified purchaser is not subject to tax. We recommend you reference cited authority for more information. |
Mass. Gen. Laws ch. 64H, §6(l) |
| Michigan Cannabis: Taxable |
Medical cannabis is subject to sales tax
We recommend you reference cited authority for more information. |
Mich. Comp. Laws §333.27601 |
| Minnesota Cannabis: See comment |
Medical cannabis is not subject to sales tax. Sales of non-medical marijuana or non-medical cannabis are subject to the general sales tax rate plus applicable local taxes even though it is currently unlawful to sell non-medical marijuana/non-medical cannabis.
Also, cannabis is subject to the cannabis and controlled substances excise tax. any illegal cannabis or controlled substance must have a cannabis or controlled substance stamp on the package, purchased from the Department of Revenue.
Cannabidiol (CBD) products are subject to sales tax regardless of how they are sold.
We recommend you reference cited authority for more information. |
CBD Products and Sales Tax, Tax Information on Medical Cannabis, Marijuana and Controlled Substance Tax, Minn. Stat. §297A.61(3) and (4), Minn. Stat. §297D.08, Unofficial department guidance |
| Mississippi Cannabis: Taxable |
Effective February 2, 2022, a dispensary must collect and remit sales tax on the gross proceeds derived from each retail sale of medical cannabis. | S.B. 2095, Laws 2022, effective February 2, 2022 |
| Missouri Cannabis: Taxable |
Medical marijuana. In addition to imposing sales and use tax on medical marijuana, 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.
Recreational marijuana. According to unofficial results of the November 8, 2022 election, Missouri voters approved a constitutional amendment that: legalizes recreational marijuana for adults aged 21 and over, and imposes a 6% marijuana tax on the retail price of recreational marijuana (non-medical marijuana).Also, localities are authorized to impose an additional sales tax in an amount not to exceed 3% on all tangible personal property retail sales of adult use marijuana. We recommend you reference cited authority for more information. |
Sec. 1, Article XIV, Missouri Constitution, Sec. 2, Article XIV, Missouri Constitution Medical Marijuana, Missouri Department of Revenue |
| Nebraska Cannabis: N/A |
N/A | |
| Nevada Cannabis: Taxable |
Cannabis is subject to:
Medical cannabis users are exempt from paying the 10% retail excise tax. |
Nev. Rev. Stat. §372.105 |
| New Jersey Cannabis: Taxable |
Retail sales of recreational cannabis and cannabis products are subject to sales and use tax. As of July 1, 2022, retail sales of medical cannabis are no longer subject to sales and use tax. New Jersey voters approved a constitutional amendment that legalizes the recreational (non-medical) use of marijuana, also known as cannabis, by adults who are 21 years of age or older, effective January 1, 2021. All retail sales of cannabis products in the new adult cannabis market are only subject to the state’s sales tax. Optional social equity excise fee: 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. Also, any sale by a cannabis cultivator for which the excise fee is imposed would be exempt from sales and use tax. Optional local cannabis transfer tax and user tax: A municipality may adopt an ordinance imposing a transfer tax on the sale of cannabis or cannabis items by a cannabis establishment that is located in the municipality. A local tax ordinance adopted 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. Any transaction for which the transfer tax or user tax is imposed, or could be imposed, other than those which generate receipts from the retail sales by cannabis retailers, are exempt from the sales and use tax. We recommend you reference cited authority for more information. |
TB-68, N.J. Stat. Ann. §54:32B-3(a), TB-104, New Jersey Constitution, Article IV, Sec. VII, Paragraph 13, Ch. 16 (A.B. 21), Laws 2021 |
| New Mexico Cannabis: Taxable |
Medical cannabis is currently subject to gross receipts tax. Recreational cannabis also legalized with commercial sales beginning no later than April 1, 2022; gross receipts tax will apply.
We recommend you reference cited authority for more information. |
N.M. Stat. Ann. §7-9-4
|
| New York Cannabis: Exempt |
Sales of medical cannabis and related products purchased to administer medical cannabis are exempt from sales tax. Instead, an excise tax is imposed on the gross receipts from the sale of medical cannabis by a registered organization to certified patients and designated caregivers.
Effective April 1, 2022, sales of adult-use cannabis products are also exempt from sales and use tax. Instead, adult-use cannabis is 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. We recommend you reference cited authority for more information. |
N.Y. Tax Law, §490, N.Y. Tax Law, §492, N.Y. Tax Law, §493, TSB-M-16(1)M |
| North Carolina Cannabis: See comment |
While there is no sales and use tax levied on cannabis, it is subject to the excise tax on controlled substances and cannabis. | |
| North Dakota Cannabis: N/A |
N/A | |
| Ohio Cannabis: Taxable |
Medical cannabis is subject to sales tax. | Ohio Rev. Code Ann. §5739.01 |
| Oklahoma Cannabis: Taxable |
Sales of medical cannabis and medical cannabis products are subject to state and local sales taxes.
We recommend you reference cited authority for more information. |
Okla. Admin. Code §710:65-19-216 |
| Pennsylvania Cannabis: Exempt |
Gross receipts tax imposed on growers/processors.
We recommend you reference cited authority for more information. |
35 P.S. §10231.901(e)
|
| Rhode Island Cannabis: Taxable |
R.I. Gen. Laws §44- 18-7(15) |
|
| South Carolina Cannabis: N/A |
N/A | |
| South Dakota Cannabis: See comment |
On November 3, 2020, voters approved Initiated Measure 26, Medical Marijuana Initiative, allowing for legalization of medical marijuana.
Voters also passed Constitutional Amendment A, Marijuana Legalization Initiative, allowing for the legalization and taxation of adult-use (recreational) marijuana to be subject to a 15% excise tax.
South Dakota is currently working on implementation rules. Additionally, there is a case pending before the South Dakota Supreme Court on the constitutionality of the amendment allowing recreational marijuana. |
|
| Tennessee Cannabis: See comment |
While there is no sales and use tax levied on cannabis, it is subject to the unauthorized substances tax. | |
| Texas Cannabis: N/A |
N/A | |
| Utah Cannabis: Exempt |
The sale by a licensed medical cannabis pharmacy of the following is exempt:
However, the sale of a medical cannabis device by a medical cannabis pharmacy is taxable. |
Utah Code Ann. §59-12-104.10 |
| Vermont Cannabis: Exempt |
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.
We recommend you reference cited authority for more information. |
Vt. Stat. Ann. tit. 7, §7902, Vt. Stat. Ann. tit. 32, §9771, Vt. Stat. Ann. tit. 32, §9773, Unofficial Department guidance |
| Virginia Cannabis: Exempt |
Sales of cannabis made through a physician's prescription are exempt from sales and use tax.
Effective January 1, 2024, in addition to the sales and use tax, an excise tax of 21% is imposed on the sale in Virginia of any retail cannabis, retail cannabis products, cannabis paraphernalia sold by a retail cannabis store, non-retail cannabis, and non-retail cannabis products. Any locality may by ordinance impose a 3% tax on any sale taxable under the state cannabis tax. We recommend you reference cited authority for more information. |
23 Va. Admin. Code §10-210-940, Va. Code Ann. §4.1-1003, 2021 Legislative Summary (P.D. 21-79), Unofficial Department Guidance |
| Washington Cannabis: Taxable |
Sales of recreational and medical cannabis are subject to tax at the general rate. Certain exemptions are available to retailers with medical cannabis endorsements.
We recommend you reference cited authority for more information. |
Wash. Rev. Code §69.50.535, Wash. Rev. Code §82.08.9998, Special Notice |
| West Virginia Cannabis: See comment |
A special medical cannabis tax is imposed at rate of 10% of gross receipts received by a grower/processor on sales to a dispensary. Tax is charged against and paid quarterly by the grower/processor. A sales tax may not be imposed on medical cannabis.
We recommend you reference cited authority for more information. |
W. Va. Code §16A-9-1 |
| Wisconsin Cannabis: Taxable |
Cannabidiol (CBD) and hemp products taxed as tangible personal property. Products may be exempt if they are food or food ingredients.
We recommend you reference cited authority for more information. |
Wis. Stat. §77.52(1)(a), Wis. Stat. §77.54(20n)(a) |
| Wyoming Cannabis: N/A |
N/A |
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