Cannabis Retailer Excise Tax Return

The California Department of Tax and Fee Administration (CDTFA) administers the Cannabis Tax Law, which imposes a cannabis excise tax upon purchasers of cannabis or cannabis products sold in this state at 15% of the gross receipts from the retail sale. Effective January 1, 2023, cannabis retailers are responsible for reporting and paying the cannabis excise tax to us.

Filing Requirements

All cannabis retailers and microbusinesses authorized to sell cannabis or cannabis products at retail are required to file theCannabis Retailer Excise Tax Return electronically on or before the last day of the month following the reporting period for which the cannabis excise tax is due. For example, the reporting period for 1Q ends March 31 and the returns for 1Q are due at the end of the following month on or before April 30. A return must be filed each reporting period even if there are no taxable transactions to report.

Payment for the amount due must be submitted by the due date of the return.

Penalties and Interest

The penalty for filing a late return and/or late payment is ten percent of the amount due for the period. In addition, the Cannabis Tax Law imposes a mandatory minimum fifty percent penalty for not paying the amount of cannabis excise tax due on or before the due date.

Interest also applies to late payments for each month, or fraction of a month, that the payment is late.

Are you reporting cannabis excise tax due on your sales of cannabis or cannabis products?

If you made retail sales of cannabis or cannabis products for this reporting period, select Yes and then Next to proceed to the Summary by Location screen (refer to the Summary by Location sectionbelow for more information).

If you have no taxable sales of cannabis or cannabis products for this reporting period, select No.

Summary by Location

A list of cannabis retailer sites that are currently registered to your account is displayed.

Note: If you have a new cannabis retail location not listed, or need to update a location's name, please add or update the business location for your sales and use tax account before filing your Cannabis Retailer Excise Tax Return.

To add or update a business location, select your sales and use tax account from your online account homepage, and under the I Want To section, select the More option and then select Register a New Location to add a new location or select Add/Edit a Location Name to update an existing location's name.

Retail Sales of Cannabis or Cannabis Products by Location

Total Gross Receipts. Enter the total gross receipts from retail sales of cannabis or cannabis products for each site location during this reporting period.

Note: Gross receipts…

• Do include the sales price of the cannabis or cannabis products, after discounts, and all charges related to the sale, such as delivery fees, and any local cannabis business tax listed separately on the invoice or receipt.
• Do include cannabis or cannabis products that were returned to you by a customer during the same period covered by this return when you refund the entire amount the customer paid for the cannabis or cannabis products either in cash or credit. The retailer may refund or credit the customer less a rehandling fee and still be considered a refund or credit of the full amount.
  • For example, if you made a cannabis sale for $100, and your customers returned and were refunded $10 (excluding any taxes refunded to the customer and any rehandling charges), the gross receipts reported on your cannabis retailer excise tax return would be $90 for the reporting period ($100 less the $10 refunded to the customer).
• Do not include sales and use tax for cannabis excise tax purposes.

If you were approved by CDTFA to retain 20 percent of the cannabis excise tax due on your retail sales reported during a reporting period as vendor compensation, the system will automatically calculate the amount of the retained vendor compensation for the retail location that is approved to retain vendor compensation.

Review the information on the screen and check the required box to confirm the information is correct.

If this information is not correct and you need assistance with vendor compensation, please contact our Customer Service Center at 1-800-400-7115 (CRS:711), then select the Special Taxes and Fees option for additional guidance before you file your return. Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays.

Are you reporting any excess excise tax collected?

If you collected more cannabis excise tax from your customers than the calculated amount due (excess cannabis tax) for this reporting period, select Yes and enter the amount of excess cannabis tax collected in the Excess Cannabis Excise Tax Collected field.

If you did not over collect for this reporting period, select No.

Note: Excess (too much) cannabis tax collected can occur in the following situations:

• When the cannabis excise tax is computed on an amount greater than the amount subject to the cannabis excise tax.
• When cannabis excise tax is computed using a rate higher than the rate imposed by law.
• When mathematical or clerical errors result in an overstatement of the cannabis excise tax on a billing.

Are you reporting any cannabis excise tax paid to a distributor for cannabis or cannabis products sold or transferred by a distributor prior to January 1, 2023 to you?

If you paid cannabis excise tax to a distributor for cannabis or cannabis products sold or transferred by a distributor prior to January 1, 2023, to you and you sold those cannabis or cannabis products in this reporting period, select Yes and then Next to proceed to the Cannabis Excise Tax Paid to a Distributor Information screen (refer to the section below for more information) to claim a credit for the amount paid (cannabis excise tax credit).

If you did not pay any cannabis excise tax to a distributor for cannabis or cannabis products you sold in this reporting period, select No.

Cannabis Excise Tax Paid to a Distributor Information

Click the Add a Record hyperlink and enter the requested information.

Distributor Name Enter the complete name of the distributor to whom you paid the cannabis excise tax.

Distributor License or Account Number. Enter the distributor's Department of Cannabis Control license number or their CDTFA account number.

• It's important that you provide us with as much information as possible regarding the distributor to whom you paid the cannabis excise tax. This allows us to verify the amount of cannabis excise tax credit you are claiming. We may also contact you for additional information if the information provided on your return cannot be verified.

Invoice Number. Enter the transactions invoice numbers. A range of invoice numbers can be entered for the amount of cannabis excise tax paid to the distributor.

Invoice Date. Enter the invoice date. This is the date for the invoice numbers you provided in the previous field and is the date the distributor sold or transferred cannabis or cannabis products to you. If you entered a range of invoices in the previous field, then enter the date of the last invoice number for the distributor you are reporting. This date must be prior to January 1, 2023, for your claimed credit to be valid.

Amount of Excise Tax Paid. Enter the amount of cannabis excise tax paid to the distributor for cannabis or cannabis products the distributor sold or transferred prior to January 1, 2023, to you for your retail sales reported in this reporting period.

Once all the information is entered, click the Add button to save the entry and return to the Cannabis Excise Tax Paid to a Distributor Information screen. If applicable, click the Add a Record hyperlink to add additional entries.

Please see our Tax Guide for Cannabis Businesses under the Retailers tab for additional information on the credit for cannabis excise tax paid to a distributor along with documentation needed to support any reported credit.

• Tax Guide for Cannabis Businesses
• Online Return Filing Tutorial
• Publication 557, Tax Help for the Cannabis Industry
• Cannabis Tax Law