Washington requires a person that holds a retailer, producer, or processor business license for marijuana to be subjected to a business and occupation tax. The special privilege tax is in addition to any other sales taxes. Marijuana businesses and dispensaries in Arkansas need to pay a 4% special privilege tax on gross receipts from medical marijuana sales in the state. The revenue raised goes into the state’s general fund and toward programs that reduce repeat criminal offenses. Since it legalized marijuana in 2014, Alaska charges a tax of $50 per ounce on sales of the drug. Some states will also impose an excise tax on the sale of marijuana, but all states have a sales tax requirement. Many of the states where marijuana is legal have used the revenue from sales of the drug to fund specific programs. Your obligations for state taxes depend on where you operate your dispensary. Being unable to claim deductions or credits can mean the cost of running a dispensary is higher than the expense of operating any other type of business. The prohibition is for any business that sells controlled substances or participates in illegal activities, not just for marijuana dispensaries. It’s important to note that, although you need to file a return and pay taxes, the Internal Revenue Code prohibits you from claiming deductions or tax credits on your return. This means you’ll need to pay federal income tax on sales from your dispensary and file an annual return with the IRS. But, the Internal Revenue Service (IRS) views any source of income as taxable, including income from the sale of marijuana. Marijuana is still illegal at the federal level. More On Cannabis CPA Accounting & Tax Services.Why Do Dispensary Owners Have Fewer Deduction Options?.Working with a tax attorney can help you comply with any regulations and avoid potential tax penalties. If you’re considering opening a dispensary or own one already, learn more about the state rules and federal tax laws. A state might tax marijuana based on the sale price, weight or potency of the drug. In states where marijuana is legal for medical or recreational use, there are usually special taxes that apply to the sale of the drug. One of the keys to business success is understanding the tax rules and how they apply to or affect your company. Meanwhile recreational marijuana is legal in 19 states and the District of Columbia, with the addition of Guam. As state laws change, entrepreneurs and business-savvy people are seeing opportunities to open dispensaries. territories - the Virgin Islands, Puerto Rico, the Northern Mariana Islands and Guam - allow the use of medical marijuana. ![]() ![]() As of 2021, marijuana is legal for recreational use in 19 states and DC.Īs of 2022, 37 states, the District of Columbia and four U.S. As of 2019, 33 states and the District of Columbia (DC) have laws that legalize marijuana in various forms.
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