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Printable Form Instructions 843 Nassau New York: What You Should Know
Using IRS Form 8300 to Report an Excise Tax on Marijuana Sales Dec 7, 2023 — A few years ago cannabis entrepreneurs and producers had multiple ways of complying with the taxes associated with cannabis commerce. Now cannabis entrepreneurs and producers are faced with a few new options, including using IRS Form 8300 as a reporting option for cannabis excise taxes. In 2014, marijuana excise taxes on production began to be paid in the form of sales. While the sale of cannabis does not trigger an excise tax, the reportable sales of cannabis do create an excise tax liability. A typical marijuana consumer will face a 3.6% tax on the first 30,000 of sales. At first glance, this is not much of an excise tax. However, this excise tax is calculated by considering the full cost of cultivation, production and distribution. This excise tax is only paid if the gross receipts in the reportable sale of cannabis exceeds a certain threshold. The threshold of 30,000 per day is a relatively low threshold and is likely to vary for different businesses or for different amounts of product sold. It is not clear what the threshold is for production. As a consequence, the threshold of reportable sales may not necessarily reflect the maximum amount of excise taxes. In addition, the threshold of a reportable sale does not always reflect the full cost of cultivation, production and distribution. The threshold varies by location. California's cannabis businesses must report sales to California residents and the state of California is obligated under the Marijuana Tax Act to collect an excise tax from a cultivation and manufacturing establishment that does not meet the requirements of California law. California requires cannabis businesses to include the gross amounts paid by each distributor or manufacturer of cannabis in the reportable sales for the business within sixty days of the close of its taxable year. Cannabis businesses that fail to meet the reporting requirements of California law due to an excise tax non-compliance must pay excise tax on all sales and report the amount of taxable sales. For California marijuana manufacturers, the manufacturer threshold for sales to California residents is also increased from 10,000 to 100,000. California allows California cannabis businesses to report gross amounts paid by each distributor or manufacturer of cannabis in its sales by January 31 of the following year. The threshold of reportable sales is the amount equal to the cost of cultivation, production and distribution plus the gross amount paid by a distributor or manufacturer. The threshold of reportable sales is increased by 100,000 for cultivation and production companies that do not meet California's minimum production requirements.
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