As cannabis businesses try to keep up with evolving regulatory and reporting requirements, their tax responsibilities and obligations may not be prioritized. These businesses must be aware of the tax implications and risks associated with this industry and seek out a qualified tax adviser to ensure compliance with the rapidly changing state tax laws across the country.
The emerging cannabis industry is evolving quickly with rapidly changing laws and regulations. Most states have legalized medical or recreational marijuana to offset budget deficits, support economic recovery with job creation, and generate millions in sales on a product that remains illegal under federal law.
As the cannabis industry grows and moves toward greater mainstream acceptance, states are taxing and tightly regulating the use and sale of cannabis and cannabis products. This activity has created complex state tax implications for businesses in the cannabis ecosystem, including distributors who procure, sell, or transport cannabis; licensed retailers; cultivators/growers; processors; and manufacturers.
In this edition of Spreading SALTovation in Tax Notes States, Tram Le and Judy Vorndran address:
- State Taxation of the Cannabis Industry
- Sales Tax Exemptions for Cannabis
- Interstate Commerce Complications in Regulating Cannabis
- Significant Challenges to Come
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