California’s Cannabis Excise Tax Generated $68.3M For Q1 2020

The California Department of Tax and Fee Administration (CDTFA) reported revenue numbers [yesterday] for cannabis sales for the 1st Quarter of 2020. As of May 15, 2020, California’s cannabis excise tax generated $68.3 million in revenue reported on the 1st Quarter 2020 returns due by April 30, 2020, and the cultivation tax generated $16.4 million.

Due to the COVID-19 pandemic, 1st Quarter 2020 is a unique reporting period since approximately half of the taxpayers normally reporting have yet to file a return with the CDTFA. Revisions to 1st Quarter 2020 data are expected in mid-August after the 2nd Quarter return filing due date of July 31. Additional information on the relief offered due to the COVID-19 pandemic can be found at COVID-19 State of Emergency.

Sales tax from cannabis businesses totaled $50.2 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 $134.9 million for 1st Quarter returns due by April 30, 2020. This does not include tax revenue collected by each jurisdiction. Previously reported revenue for 4th Quarter 2019 returns was revised to $177.3 million, which included $85.9 million in cannabis excise tax, $24.1 million in cultivation tax, and $67.3 million in sales tax. Revisions to quarterly data are the result of amended and late returns, and other tax return adjustments.
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