Cannabis Business Tax
The cannabis business tax is for the privilege of cultivating, manufacturing, producing, preparing, storing, providing, donating, selling, or distributing cannabis or cannabis products in the unincorporated area of the County, in accordance with the authority granted by Revenue and Taxation Code section 34021.5.
Chapter 64-16 of the Contra Costa County Code establishes the tax rates for cannabis businesses. The tax is levied based upon gross receipts of commercial cannabis activities and upon square footage of cannabis plant canopy. It is not a sales and use tax, a tax upon income, or a tax upon real property.
Tax on commercial cannabis cultivation
Beginning January 1, 2019, the tax rates on commercial cannabis cultivation are as follows:
- Seven dollars ($7.00) per square foot of canopy space in a structure where indoor cultivation occurs.
- Four dollars ($4.00) per square foot of canopy space in a structure where mixed-light cultivation occurs.
- Two dollars ($2.00) per square foot of canopy space where outdoor cultivation occurs.
- One dollar ($1.00) per square foot of canopy space in a facility that operates exclusively as a nursery.
Note: A square footage of canopy space is the maximum square footage of canopy space allowed by the County zoning permit authorizing the commercial cannabis cultivation activity.
Tax on cannabis distribution
Beginning January 1, 2019, the tax rate on cannabis distribution is two percent (2%) of gross receipts.
Tax on cannabis manufacturing
Beginning January 1, 2019, the tax rate on cannabis manufacturing is two and one-half percent (2.5%) of gross receipts.
Tax on cannabis retailers
Beginning January 1, 2019, the tax rate on cannabis retailers is four percent (4%) of gross receipts.
Tax on cannabis testing laboratories
Beginning January 1, 2019, the tax rate on cannabis testing laboratories is zero percent (0%) of gross receipts.
Tax on vertically-integrated businesses
Beginning January 1, 2019, the tax rate on vertically-integrated businesses engaged in retail sales is four percent (4%) of gross receipts. Vertically-integrated businesses not engaged in retail sales is two and one-half percent (2.5%) of gross receipts.
Personal cultivation not taxes
There is no cannabis business tax for personal use of cannabis that is exempted from state licensing requirements, that meets the definition of personal use or equivalent terminology under state law, and for which a person receives no compensation whatsoever related to that personal use.
Reporting and Remittance of Cannabis Business Tax
The cannabis business tax is due and payable in legal tender and in accordance with Revenue and Taxation Code section 2501 et seq. The cannabis business tax is due and payable on a quarterly basis as follows:
Each person owing cannabis business tax shall, on or before the last day of the month following the close of each calendar quarter (i.e., on or before April 30, July 31, October 31, or January 31, as applicable), complete and submit to the Treasurer-Tax Collector a tax statement and remit to the Treasurer-Tax Collector the tax due. The tax due is no less than the quarterly installment due, but a person may at any time pay the estimated tax due for the entire fiscal year. Any deficiencies of the estimated tax due must be remitted before the last day of the month following the calendar quarter in which the deficiency existed to avoid penalties. If a due date falls on a Saturday, a Sunday, or a holiday, the due date is the next regular business day on which the County is open to the public.
If a tax is owed on commercial cannabis cultivation, the tax due shall be determined in accordance with section 64-16.404(b) of the County Code. The tax will not be prorated or adjusted for any reduction in the square footage of canopy authorized but not utilized for cultivation. If cultivation begins in the middle of a fiscal year (fiscal years run from July 1 through June 30), the Treasurer-Tax Collector will prorate, in monthly increments, the amount due for the fiscal year.
All cannabis business tax statements must be completed on the forms designated by the Treasurer-Tax Collector. (TBA)