California wants marijuana shops to pay back taxes

[AntZ]

California wants marijuana shops to pay back taxes


By Peter Hecht | The Sacramento Bee

* Posted on Thursday, March 10, 2011




As one of California's pioneering marijuana dispensaries, the Berkeley Patients Group served thousands of medical marijuana users and handled tens of millions of dollars in pot transactions a year.

But until 2007, the dispensary didn't charge customers sales taxes nor did it pay them to the state, contending that marijuana as medicine wasn't taxable.

California tax officials, strapped for cash, disagreed and now the State Board of Equalization is ordering the Berkeley facility to pay $6.4 million in back taxes and interest on $51 million in pot sales between 2004 and 2007.

The case is illuminating efforts by the state – plus Sacramento and other cities – to collect revenue from California's burgeoning medical cannabis industry.

Since last October, the state tax board has completed audits on 32 other marijuana dispensaries, demanding $4.5 million in sales taxes and interest.

In September, the board ordered another Berkeley medical marijuana outlet, Community Flavor, to pay $600,000 in taxes and interest on $4.9 million in marijuana and $670,000 in pot cookie sales the dispensary argued were exempt from taxes between 2005 and 2008.

"It is our intent to identify where there could be a problem and then aggressively go in and enforce the law," said BOE Chairman Jerome Horton. "You will see a lot more investigations to assist them in complying with law."

The BOE estimates it takes in $57 million to $105 million in sales taxes as dispensaries ring up as much as $1.3 billion in annual pot transactions


http://www.mcclatchydc.com/2011/03/1...ana-shops.html


__________________________

Funny to think back before the Nov. elections when the potheads were trying to pass the MJ law in Calif. One of their selling points was the tax benefits from MJ sales and how it will be a windfall to help the deficit! Sure!

They won't even pay the taxes they owe now! Good thing everyone saw through that farce!

[Arkady Renko]

would be absurd if they didn't, that's one of the main advantages of legalization after all.

[FBD]

If it is to be included in taxation, write it up so that it is to be so. But dont retroactively apply the shit because your state cant keep its finances straight.

[PorkChopSandwiches]

California wants marijuana shops to pay back taxes


By Peter Hecht | The Sacramento Bee

* Posted on Thursday, March 10, 2011




As one of California's pioneering marijuana dispensaries, the Berkeley Patients Group served thousands of medical marijuana users and handled tens of millions of dollars in pot transactions a year.

But until 2007, the dispensary didn't charge customers sales taxes nor did it pay them to the state, contending that marijuana as medicine wasn't taxable.

California tax officials, strapped for cash, disagreed and now the State Board of Equalization is ordering the Berkeley facility to pay $6.4 million in back taxes and interest on $51 million in pot sales between 2004 and 2007.

The case is illuminating efforts by the state – plus Sacramento and other cities – to collect revenue from California's burgeoning medical cannabis industry.

Since last October, the state tax board has completed audits on 32 other marijuana dispensaries, demanding $4.5 million in sales taxes and interest.

In September, the board ordered another Berkeley medical marijuana outlet, Community Flavor, to pay $600,000 in taxes and interest on $4.9 million in marijuana and $670,000 in pot cookie sales the dispensary argued were exempt from taxes between 2005 and 2008.

"It is our intent to identify where there could be a problem and then aggressively go in and enforce the law," said BOE Chairman Jerome Horton. "You will see a lot more investigations to assist them in complying with law."

The BOE estimates it takes in $57 million to $105 million in sales taxes as dispensaries ring up as much as $1.3 billion in annual pot transactions


http://www.mcclatchydc.com/2011/03/1...ana-shops.html


__________________________

Funny to think back before the Nov. elections when the potheads were trying to pass the MJ law in Calif. One of their selling points was the tax benefits from MJ sales and how it will be a windfall to help the deficit! Sure!

They won't even pay the taxes they owe now! Good thing everyone saw through that farce!

What we were voting on was out right legalization, then we would pay the taxes. As it stands now its "medicine" so they shouldn't be paying taxes, let alone back taxes.

[Arkady Renko]

What we were voting on was out right legalization, then we would pay the taxes. As it stands now its "medicine" so they shouldn't be paying taxes, let alone back taxes.

why? Are other drugs tax free in Cali? I thought over the counter stuff came with sales tax over there.

[Teh One Who Knocks]

why? Are other drugs tax free in Cali? I thought over the counter stuff came with sales tax over there.

Sales tax laws in the US vary widely because each state has its own set of rules as to what is taxable and what is exempt. But for the most part, prescription drugs in the US are tax exempt:

There is no Federal sales or use tax in the United States. All but five states impose 'sales and use taxes on retail sale, lease and rental of many goods, as well as some services. Many cities, counties, transit authorities and special purpose districts impose an additional local sales or use tax. Sales and use tax is calculated as the purchase price times the appropriate tax rate. Tax rates vary widely by jurisdiction from less than 1% to over 10%. Sales tax is collected by the seller at the time of sale. Use tax is self assessed by a buyer who has not paid sales tax on a taxable purchase.

Unlike value added tax, sales tax is imposed only once, at the retail level, on any particular goods. Definitions of the types of sales and what goods and services are taxable vary among the states. Nearly all jurisdictions provide numerous categories of goods and services that are exempt from sales tax, or taxed at a reduced rate. Purchase of goods for further manufacture or for resale is uniformly exempt from sales tax. Most jurisdictions exempt food sold in grocery stores, prescription medications, and many agricultural supplies. Generally cash discounts, including coupons, are not included in the price used in computing tax.

Sales taxes, including those imposed by local governments, are generally administered at the state level. States imposing sales tax require retail sellers to collect tax from customers, file returns, and remit the tax to the state. Procedural rules vary widely. Sellers generally must collect tax from in-state purchasers unless the purchaser provides an exemption certificate. Most states allow or require electronic remittance of tax to the state. States are prohibited from requiring out of state sellers to collect tax unless the seller has some minimal connection with the state.

[AntZ]

What we were voting on was out right legalization, then we would pay the taxes. As it stands now its "medicine" so they shouldn't be paying taxes, let alone back taxes.

I know, I'm a California voter too!

The issue here is not just the "medicine"! It's the wide range of MJ products that are money making cash cows for the shops!

You don't walk into CVS and get your heart medication in cakes and your Viagra in cookies!

[Godfather]

Odd, I'm just surprised they weren't already paying taxes... I thought that was the big reason they're allowed to go on, aside from the fact that half the state is probably using these dispensaries

[AntZ]

Either way, welcome to the world of doing business in California!!

What was legal today is illegal tomorrow! Regulations and restrictions flow like raw sewage out of Sacramento. And the Berkeley types have always led the charge to raise taxes on any kind of industry, now guess what, their proud multi-million weed industry needs to kick in!

[Arkady Renko]

Sales tax laws in the US vary widely because each state has its own set of rules as to what is taxable and what is exempt. But for the most part, prescription drugs in the US are tax exempt:

Aha, thanks or digging that up for me. Did you read the bit about the coupons?