Sacramento – The California Department of Tax and Fee Administration reported cannabis tax revenues Friday for the 4th quarter of 2019 far exceeded revenue in the same period a year ago.
As of February 18, 2020, California’s cannabis excise tax generated $84.4 million in revenue reported on the 4th quarter 2019 returns due by January 31, 2020, and the cultivation tax generated $23.6 million.
Sales taxes from cannabis businesses totaled $64.7 million in revenue for the same period. Sales tax applies to sales of cannabis, cannabis products, and other tangible personal property.
Certain retail sales of medicinal cannabis are exempt from sales and use taxes when the purchaser provides at the time of purchase a valid Medical Marijuana Identification Card issued by the California Department of Public Health and a valid government-issued identification card.
Total tax revenue reported by the cannabis industry is $172.7 million for 4th quarter returns due by January 31, 2020. This does not include taxes collected by each jurisdiction.
That’s a $69.7 million spike over the $103.3 million total for the 4th quarter of 2018, also not including taxes collected by each jurisdiction.
Previously reported revenue for 3rd quarter 2019 returns was revised to $170.1 million, which included $84.4 million in cannabis excise tax, $22.7 million in cultivation tax, and $63 million in sales taxes. Revisions to quarterly data are the result of amended and late returns and other tax return adjustments.
Since January 2018, total program revenue to date is $1.03 billion, which includes $498.1 million in cannabis excise taxes, $123.4 million in cultivation taxes, and $403.1 million in sales taxes.
In November 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act. Beginning on January 1, 2018, two new cannabis taxes went into effect: a cultivation tax on all harvested cannabis that enters the commercial market and a 15 percent cannabis excise tax upon purchasers of cannabis and cannabis products. In addition, retail sales of cannabis and cannabis products are subject to state and local sales taxes.
To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.
About the CDTFA
The California Department of Tax and Fee Administration administers California’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other taxes and fees that fund specific state programs. CDTFA-administered programs account for more than $70 billion annually which in turn supports local essential services such as transportation, public safety and health, libraries, schools, social services, and natural resource management programs through the distribution of tax dollars going directly to local communities.