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October 04 2018

IRS Penalizes Cannabis Operator for Federal Income Tax Evasion

The IRS fined an Oregon cannabis operator for failing to file income tax returns on his legal cannabis operation. 

  • Cannabis business owner Matthew Price did not report nearly $1 million in income and used his business money on personal expenses in violation of federal tax regulations.
  • This...
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Filed Under: News, Compliance, Taxes, Oregon

August 21 2018

5 Tips for Great Cannabis Business Accounting

Take some of the stress out of running your cannabis venture by setting up a strong accounting system.

  • Start with a chart of accounts that can help you keep track of everything.
  • Even if you can’t deduct everything from your taxes, you should still keep track of ALL your expenses.
  • Revisit...
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Filed Under: Compliance, Taxes

August 15 2018

How the 280e Tax Regulation Affects Your Cannabis Business

The 280e prevents legal cannabis businesses from deducting certain business expenses on their tax returns.

  • Cannabis is still a federally-regulated Schedule I Controlled Substance, which means the 280e applies to legal cannabis operators. 
  • The taxable amount of a cannabis business is often...
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Filed Under: Compliance, Taxes

July 04 2018

How Does California’s Cultivation Tax Apply to Cannabis Pre-Rolls?

Who pays the cultivation tax, and how much tax is charged for cannabis pre-rolls? We'll take you through it in this post. 

  • The cultivator is not responsible for the cultivation tax when they sell cannabis pre-rolls to a processor. 
  • The processor pays cultivation tax to the distributor...
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Filed Under: California, Taxes

June 27 2018

How Do Cannabis Taxes Apply to Immature Plants, Seeds and Clones?

Learn how the cultivation, excise, and sales taxes apply differently to immature plans, seeds, and clones.

  • Cultivation tax does not apply to the sale of immature plants, seeds, and clones. 
  • Sales tax applies when any cannabis item (including plants, seeds and clones) is sold in the retail...
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Filed Under: Taxes

June 27 2018

How to Collect and Disburse the Cannabis Excise Tax

Cannabis retailers must collect a 15% excise tax from customers – here's how to do it

  • Excise tax is charged differently in an arm's length and non-arm's-length transaction. 
  • In an arm’s length transaction, you should factor the excise tax into any discounts or promotional pricing you...
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Filed Under: Taxes

March 29 2018

Tax Reform Updates: Should You Convert from an S-Corps to a C-Corps?

The 2018 tax reform bill passed by Congress brought a lot of new changes to federal taxes for California cannabis businesses. You may have some questions about how to take advantage of these changes, which is why we’re covering all new deductions, liabilities, and tax considerations in...

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Filed Under: Taxes

December 11 2017

Everything You Need to Know About California’s Cannabis Excise and Cultivation Taxes (and Penalties)

Questions about cannabis excise and cultivation taxes in California? Read this complete guide for everything you need to know.

  • Retailers are responsible for collecting the cannabis excise tax and then for paying the tax to the distributor.
  • Excise tax is set at 15% of average market price. 
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Filed Under: Compliance, Taxes

December 04 2017

5 Tax Questions to Ask When Structuring Your Cannabis Business

Nonprofit, C-Corp, LLC: what business structure offers the best tax benefits for new cannabis companies?

  • A multi-entity structure limits your liability and can protect your interest – but also create a logistical nightmare.
  • C-Corp is one of the most popular options, but beware the double...
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Filed Under: Taxes, Business