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Multistate 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 | See comment | However, 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. We recommend you contact Alabama Department of Revenue for more information. |
|
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 | N/A | Medical cannabis (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 | N/A | ||
Missouri | Taxable |
In addition to imposing sales and use tax on medical cannabis, a 4% medical cannabis tax is imposed on retail sales of cannabis for medical use that are sold at medical cannabis dispensary facilities in Missouri. |
Sec. 1, 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 | The sales tax on medical cannabis dispensed by a medical cannabis dispensary or clinical registrant is being phased out. Currently, the rate is 2%. The rate will be reduced to 0% (completely exempt) beginning July 1, 2022. New Jersey voters approved a constitutional amendment that legalizes the recreational (non-medical) use of 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. Optional social equity excise fee: An optional social equity excise fee can be imposed by the Cannabis Regulatory Commission on personal use cultivation activities by licensed cannabis cultivators, including those alternative treatment centers deemed to be, and actually issued, cultivation licenses. Medical cannabis cultivation activities would not be subject to the excise fee. Also, any sale by a cannabis cultivator for which the excise fee is imposed would be exempt from sales and use tax. Optional local cannabis transfer tax and user tax: A municipality may adopt an ordinance imposing a transfer tax on the sale of cannabis or cannabis items by a cannabis establishment that is located in the municipality. A local tax ordinance adopted must also include provisions for imposing a user tax, at the equivalent transfer tax rates, on any concurrent license holder operating more than one cannabis establishment. Any transaction for which the transfer tax or user tax is imposed, or could be imposed, other than those which generate receipts from the retail sales by cannabis retailers, are exempt from the sales and use tax. We recommend you reference cited authority for more information. |
N.J. Stat. Ann. §54:32B-3(a), TB-68, 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.
CCH® AnswerConnect
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