CDTFA reports cannabis tax revenues for 4th quarter 2020

The California Department of Tax and Fee Administration’s (CDTFA) reported revenue numbers last week for cannabis sales for the 4th Quarter of 2020. As of Feb. 17, 2021, California’s cannabis excise tax generated $123.4 million in revenue reported on the 4th Quarter 2020 returns and the cultivation tax generated $31.6 million.

Due to the COVID-19 pandemic, all but the largest taxpayers were given a three-month extension to file their 4th Quarter 2020 tax returns with CDTFA. These returns are now due on April 30, 2021. Revisions to 4th Quarter 2020 data are expected in mid-May after the 1st Quarter 2021 return filing due date of April 30. 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 $81.4 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 $236.4 million for 4th Quarter returns.

This does not include tax revenue collected by each jurisdiction. Previously reported revenue for 3rd Quarter 2020 returns was revised to $318.9 million, which included $165.7 million in cannabis excise tax, $42.5 million in cultivation tax, and $110.7 million in sales tax. 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 $2.07 billion, which includes $1.04 billion in cannabis excise tax, $256.6 million in cultivation tax, and $771.7 million in sales tax.

In November 2016, California voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act. Beginning on Jan. 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 tax. To learn more, visit the Tax Guide for Cannabis Businesses on the CDTFA website.

The California Department of Tax and Fee Administration (CDTFA) 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 over $73 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.