The truth behind taxes on your cannabis purchase
Cannabis dealers are required to calculate and collect the 15% cannabis tax on the sale or transfer of cannabis or cannabis products based on the average market price of the cannabis. If the cannabis retailer is also the distributor the average market price of the cannabis is equal to the gross receipts and the 15% cannabis excise tax is applied to the gross receipts of the retail sale of the cannabis.
What is included in the gross receipts?
If you have never worked in retail before here is how we define “Gross Receipts” The gross receipts would be the operating cost related to the generation of the sale of the product. In this case, the product is cannabis. Included in the Gross Receipt are any labor charges or transportation fees like delivery. Included in this would be the Cannabis business tax required by a city or municipality.
You are a licensed microbusiness that sells and distributes cannabis. (AGA)
The retail price of the cannabis flowers is $35 / 8th ounce.
In this example, you charge $5 for delivery
You have a sales tax rate of 8.5%
And a business tax rate of 10%
There are three separate taxes that will be assessed – They are the sales tax – the cannabis excise tax and the business tax.
Selling Price of Cannabis = $35.00
Cannabis Business Tax (10%) = $3.50
Delivery cost = $5.00
Subtotal ($35 + $3.50 + $5.00) $43.50
Excise Tax ($43.50 x 15%) = $6.53
Sales Tax Calculation
Subtotal ($43.50 + $6.53) = $50.03
Sales Tax ($50.03 x 8.5%) = $4.25
Total Due ($50.03 + $4.25) = $54.28
This is why our Tax Free Sunday Prom