Tax Alert - California Enacts Sales and Use Tax Restrictions for Cannabis

The California cannabis trailer bill for the 2020-21 budget, which contains changes necessary to implement the budget, is enacted for cannabis excise and cultivation tax purposes.

Cannabis Excise Tax Mark-Up Amount


The California Department of Tax and Fee Administration (CDTFA) is prohibited from increasing the mark-up amount during the period beginning on and after September 18, 2020, and before July 1, 2021.

Cannabis Cultivation Tax Inflation Adjustment


The CDTFA is also prohibited from adjusting for inflation the cannabis cultivation tax rates that are imposed in the 2021 calendar year unless the adjustment is for an inflation rate that is less than zero. Moreover, beginning January 1, 2023, the rates imposed for the previous calendar year must be annually adjusted for inflation by the CDTFA.

Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.

For further information or to arrange a consultation, please contact Wilson Tax Law Group, APLC  at our offices in Newport Beach or Yorba Linda, California.

Tel: (949) 397-2292 (Newport Beach Office)

Tel: (714) 463-4430 (Yorba Linda Office)

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