For Immediate Release
November 8, 2017
Contact: Office of Public Affairs
Cannabis Sellers Must Register with the California Department of Tax and Fee Administration
Sacramento – Individuals planning to sell cannabis or cannabis products on January 1, 2018, must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit. Cannabis cultivators, processors, manufacturers, retailers, microbusinesses and distributors who make sales are required to obtain and maintain a seller's permit as a prerequisite for applying for a license with the Bureau of Cannabis Control, the Department of Food and Agriculture, or the Department of Public Health. It is easy and convenient to register online with the CDTFA. Individuals who already have a seller's permit (including a permit previously issued by the Board of Equalization) do not need to register for a new one.
In addition, distributors of cannabis and cannabis products must also register with the CDTFA for a cannabis tax permit – which is separate from a seller's permit – in order to report and pay the two new cannabis taxes to the CDTFA starting in January 2018. Registration for the cannabis tax permit will be available on November 20, 2017.
Beginning January 1, 2018, two new cannabis taxes will be in effect:
- A 15 percent excise tax is imposed on purchasers of cannabis and cannabis products. Retailers are required to collect the excise tax from the purchaser and pay it to the cannabis distributor.
- A tax on the cultivation of cannabis that enters the commercial market is imposed on cultivators, who are required to pay the cultivation tax to either a distributor or manufacturer depending upon the nature of the transaction. The cultivation tax rates are $9.25 per dry weight ounce of cannabis flowers, and $2.75 per dry-weight ounce of cannabis leaves.
Individuals who operate a cannabis business that does not make sales will need to obtain a certification letter from the CDTFA indicating that their business does not require a seller's permit. The certification letter will be available through the CDTFA online registration system beginning November 20, 2017. Individuals may also sign up for CDTFA Cannabis ListServ notifications for the latest information on how to comply with the new laws related to cannabis businesses.
Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice that may be relied on, pursuant to California Code of Regulations, title 18, sections 1705 and 4902. Changes in tax law or regulations may have occurred since the time this news release was written. If there is a conflict between the text of this news release and the law, decisions will be based upon the law and not this news release. For specific help, please contact the CDTFA at 1-800-400-7115.