Sales Tax Articles
Sales Tax State Activity Update - March 2007
California Cuts through the "Purple Haze" of Medical Marijuana Taxation
The Board of Equalization, as part of their education outreach efforts, has issued a Special Notice aimed at sellers of medical marijuana. The notice explains that sales of medical marijuana are generally subject to sales tax and that vendors of this product are required to hold a seller's permit. Registration instructions were provided as part of the notice, as well as a warning against failing to register and report and pay taxes due.
Applying for a seller's permit typically requires a vendor to provide information about the products they sell and purchase, and information about their suppliers. Sellers of medical marijuana who do not wish to provide certain information for any reason, including concerns about confidentiality and self-incrimination, will still be issued a permit. The permit's main function is to allow a vendor to collect, report, and pay taxes due. However, without relevant information, the Board notes that they may not be able to provide copies of pertinent publications and regulations or other relevant information to the permitee.
The notice concludes by reminding taxpayers that having a seller's permit does not provide sellers with the authority to make unlawful sales. Permitees are required to obey all federal and state laws that regulate or control their business.
This full text may be viewed on the California State Board of Equalization website.
(California Board of Equalization, Special Notice, February 2007)
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