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State by state sales tax on cannabis
This chart indicates whether cannabis sold legally for medical or recreational use is subject to sales tax.
STATE | CANNABIS | COMMENTS | CITATION |
Alabama | Taxable |
Effective January 1, 2022, there is imposed a tax on the gross proceeds of the sales of medical cannabis when sold at retail in Alabama at the rate of 9% of the gross proceeds of the sales. In addition, Alabama does have an illegal drug tax, which is an excise tax on illegal possession, distribution, sales, use, and other transactions involving certain drugs or controlled substances. |
Ala. Code §20-2A-80 |
Arizona | Taxable |
Medical cannabis is subject to general state sales tax, as well as any applicable city or county taxes. |
Ariz. Rev. Stat. §42- 5010 |
Arkansas | See comment |
A sale of usable cannabis is subject to state and local sales taxes at the same rate as other tangible personal property. |
Ark. Code Ann. §26- 57-1504 |
California | Taxable |
Sales and use tax applies to retail sales of cannabis and cannabis products. |
Cal. Rev. & Tax. Code §34011, Cal. Rev. & Tax. Code §34012, Special Notice L-481, California State Board of Equalization, October 2016, Tax Guide for Medical Cannabis Businesses, California State Board of Equalization, November 2016 |
Colorado | Taxable |
Medical cannabis is subject to general sales tax. |
Colo. Rev. Stat. §39-26-104(1)(a), Colo. Rev. Stat. § 39-28.8-202 |
Connecticut | Taxable |
Effective July 1, 2021, a state tax is imposed on retail sales of cannabis, cannabis plant material, and cannabis edible products by a cannabis or hybrid retailer or micro-cultivator, with certain exceptions. The tax rate is based on the product’s type and total THC reflected on its label as follows:
In addition, a 3% municipal sales tax is imposed on the gross receipts from the sale of cannabis by a cannabis or hybrid retailer or micro-cultivator that must be administered in accordance with the state sales and use tax law. |
|
District of Columbia | Not Taxable |
Federal law prohibits the sale of cannabis. We recommend you reference cited authority for more information. |
D.C. Code Ann. §47- 2002(a)(7) |
Florida | Exempt |
Medical cannabis and cannabis delivery devices are exempt from sales and use tax. We recommend you reference cited authority for more information. |
Fla. Stat. §212.08(2)(l) |
Georgia | N/A | ||
Hawaii | Taxable |
Exemption for prescription drugs does not apply to medical cannabis or manufactured medical cannabis product. We recommend you reference cited authority for more information. |
Haw. Rev. Stat. §237-24.3(6) |
Idaho | N/A | However, Idaho has an illegal drug stamp excise tax. We recommend you reference cited authority for more information. |
Idaho Code §63-4203, Idaho Code §63-4205 |
Illinois | Taxable |
Both medical cannabis and adult use cannabis are subject to the retailers’ occupation tax. |
35 ILCS 120/2-10, Informational Bulletin FY 2020-12, Informational Bulletin FY 2020-16, Cannabis Tax Frequently Asked Questions |
Indiana | N/A | ||
Iowa | Taxable | Medical marijuana (CBD oil with less than 3% THC) is subject to state sales tax. | |
Kansas | N/A | ||
Kentucky | N/A | ||
Louisiana | N/A | Louisiana imposes an excise tax on cannabis and controlled dangerous substances and industrial hemp-derived CBD products. | |
Maine | Taxable |
Medical cannabis is subject to sales tax at the state rate. Retail sales of adult use recreational cannabis, permissible as of May 2, 2018, will be subject to a special tax rate of 10%. |
Me. Rev. Stat. Ann. tit. 36, §1760(5) |
Maryland | Exempt | We recommend you reference cited authority for more information. | Md. Code Regs. 03.06.01.09 |
Massachusetts | Taxable |
Retail cannabis sales are subject to the 6.25% state sales tax, 10.75% state excise tax, and up to 3% local option tax. |
Mass. Gen. Laws ch. 64H, §6(l) |
Michigan | Taxable |
Medical cannabis is subject to sales tax We recommend you reference cited authority for more information. |
Mich. Comp. Laws §333.27601 |
Minnesota | See comments |
Medical cannabis is not subject to sales tax. Sales of non-medical marijuana or non-medical cannabis are subject to the general sales tax rate plus applicable local taxes even though it is currently unlawful to sell non-medical marijuana/non-medical cannabis. |
CBD Products and Sales Tax, Tax Information on Medical Cannabis, Marijuana and Controlled Substance Tax, Minn. Stat. §297A.61(3) and (4), Minn. Stat. §297D.08, Unofficial department guidance |
Mississippi | Taxable | Effective February 2, 2022, a dispensary must collect and remit sales tax on the gross proceeds derived from each retail sale of medical cannabis. | S.B. 2095, Laws 2022, effective February 2, 2022 |
Missouri | Taxable |
Medical marijuana. In addition to imposing sales and use tax on medical marijuana, a 4% medical marijuana tax is imposed on retail sales of marijuana for medical use that are sold at medical marijuana dispensary facilities in Missouri. Recreational marijuana. According to unofficial results of the November 8, 2022 election, Missouri voters approved a constitutional amendment that: legalizes recreational marijuana for adults aged 21 and over, and imposes a 6% marijuana tax on the retail price of recreational marijuana (non-medical marijuana).Also, localities are authorized to impose an additional sales tax in an amount not to exceed 3% on all tangible personal property retail sales of adult use marijuana. |
Sec. 1, Article XIV, Missouri Constitution, Sec. 2, Article XIV, Missouri Constitution Medical Marijuana, Missouri Department of Revenue |
Nebraska | N/A | ||
Nevada | Taxable |
Cannabis is subject to:
Medical cannabis users are exempt from paying the 10% retail excise tax. |
Nev. Rev. Stat. §372.105 |
New Jersey | Taxable |
Retail sales of recreational cannabis and cannabis products are subject to sales and use tax. As of July 1, 2022, retail sales of medical cannabis are no longer subject to sales and use tax. New Jersey voters approved a constitutional amendment that legalizes the recreational (non-medical) use of marijuana, also known as cannabis, by adults who are 21 years of age or older, effective January 1, 2021. All retail sales of cannabis products in the new adult cannabis market are only subject to the state’s sales tax. |
TB-68, N.J. Stat. Ann. §54:32B-3(a), TB-104, New Jersey Constitution, Article IV, Sec. VII, Paragraph 13, Ch. 16 (A.B. 21), Laws 2021 |
New Mexico | Taxable | Medical cannabis is currently subject to gross receipts tax. Recreational cannabis also legalized with commercial sales beginning no later than April 1, 2022; gross receipts tax will apply. We recommend you reference cited authority for more information. |
N.M. Stat. Ann. §7-9-4 |
New York | Exempt |
Sales of medical cannabis and related products purchased to administer medical cannabis are exempt from sales tax. Instead, an excise tax is imposed on the gross receipts from the sale of medical cannabis by a registered organization to certified patients and designated caregivers. |
N.Y. Tax Law, §490, N.Y. Tax Law, §492, N.Y. Tax Law, §493, TSB-M-16(1)M |
North Carolina | See comment |
While there is no sales and use tax levied on cannabis, it is subject to the excise tax on controlled substances and cannabis. |
|
North Dakota | N/A | ||
Ohio | Taxable | Medical cannabis is subject to sales tax. | Ohio Rev. Code Ann. §5739.01 |
Oklahoma | Taxable |
Sales of medical cannabis and medical cannabis products are subject to state and local sales taxes. We recommend you reference cited authority for more information. |
Okla. Admin. Code §710:65-19-216 |
Pennsylvania | Exempt |
Gross receipts tax imposed on growers/processors. We recommend you reference cited authority for more information. |
35 P.S. §10231.901(e) |
Rhode Island | Taxable | R.I. Gen. Laws §44- 18-7(15) |
|
South Carolina | N/A | ||
South Dakota | See comments |
On November 3, 2020, voters approved Initiated Measure 26, Medical Marijuana Initiative, allowing for legalization of medical marijuana. |
|
Tennessee | See comment | While there is no sales and use tax levied on cannabis, it is subject to the unauthorized substances tax. | |
Texas | N/A | ||
Utah | Exempt |
The sale by a licensed medical cannabis pharmacy of the following is exempt:
However, the sale of a medical cannabis device by a medical cannabis pharmacy is taxable. |
Utah Code Ann. §59- 12-104.10 |
Vermont | Exempt | Effective March 1, 2022, a cannabis excise tax of 14% of the sales price of each retail sale in Vermont is imposed on cannabis and cannabis products, including food or beverages. We recommend you reference cited authority for more information. |
Vt. Stat. Ann. tit. 7, §7902, Vt. Stat. Ann. tit. 32, §9771, Vt. Stat. Ann. tit. 32, §9773, Unofficial Department guidance |
Virginia | Exempt |
Sales of cannabis made through a physician's prescription are exempt from sales and use tax. |
23 Va. Admin. Code §10-210-940, Va. Code Ann. §4.1-1003, 2021 Legislative Summary (P.D. 21-79), Unofficial Department Guidance |
Washington | Taxable |
Sales of recreational and medical cannabis are subject to tax at the general rate. Certain exemptions are available to retailers with medical cannabis endorsements. |
Wash. Rev. Code §69.50.535, Wash. Rev. Code §82.08.9998, Special Notice |
West Virginia | See comment |
A special medical cannabis tax is imposed at rate of 10% of gross receipts received by a grower/processor on sales to a dispensary. Tax is charged against and paid quarterly by the grower/processor. A sales tax may not be imposed on medical cannabis. |
W. Va. Code §16A-9- 1 |
Wisconsin | Taxable | Cannabidiol (CBD) and hemp products taxed as tangible personal property. Products may be exempt if they are food or food ingredients. We recommend you reference cited authority for more information. |
Wis. Stat. §77.52(1)(a), Wis. Stat. §77.54(20n)(a) |
Wyoming | N/A |
Source: Wolters Kluwer CCH® AnswerConnect, 2022
Permission for use granted.
Permission for use granted.
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