California taxes its residents on all income, including income from cannabis business activities. California taxes non-residents on income from California sources. All income apportioned to California by business entities is taxable. Income from entities organized as not-for-profit is also taxable. For information about California income tax for cannabis business activities, visit Franchise Tax Board’s website at ftb.ca.gov/Cannabis.
California businesses that hire employees to perform services are required by law to withhold, report, and pay payroll taxes. For information about cannabis industry payroll tax and reporting, visit the Employment Development Department’s website at edd.ca.gov/Cannabis.
Sales, Use, and Cannabis Taxes
The California Department of Tax and Fee Administration (CDTFA) is the state agency responsible for collecting cannabis taxes and issuing seller’s permits. If you own a business in California that sells cannabis and/or cannabis products, you must register with CDTFA for a seller’s permit and regularly file sales and use tax returns. For information about the requirements that apply to your business, please review the links listed below.
- Tax Guide for Cannabis Businesses
- Cannabis Special Notice – Important Cannabis Excise Tax Reminders for Cannabis Retailers and Distributors
- New Emergency Regulation for Cannabis Distributors and Retailers Requires California Cannabis Track-and-Trace
- Important Information for Cannabis Distributors
- Guidance on How Taxes Apply to Cannabis Inventory Beginning January 1, 2018
- Notice of Proposed Emergency Regulation
- New Proposed Cultivation Tax Category, Tax Application, and Invoicing Requirements for Cannabis Businesses
- Cannabis – What you Need to Know about the Tax Rates and Registration
- New Cannabis Taxes Begin January 1, 2018
- Recordkeeping Requirements for Exempt Sales of Medical Marijuana Beginning November 9, 2016
- Information About Proposition 64 for Sellers of Medical Marijuana (L-481)