cbd tax service

Cbd tax service

In the case of meal tax, CBD products can be exempt from sales tax. Since meals and sales tax are exclusive in nature, CBD, as part of a meal would not be eligible to be taxed for sales. It would be either taxable or exempt for meals tax, as it follows the taxability of the meal.

Cannabidiol (CBD) is a naturally occurring substance produced in hemp plants. While some associate CBD with marijuana, the truth is these products vary in their composition. CBD contains minute or no amounts of Tetrahydrocannabinol (THC), the psychoactive compound in marijuana. When ingested, CBD products do not give their user the same feeling of intoxication. Their theoretical use is to promote therapeutic benefits. In many cases, these products have not been approved by the FDA (Epidiolex has been approved, used to treat children with epileptic syndromes). In 2018, the US Farm Law that legalized the cultivation of industrial hemp, also made hemp-derived CBD legal.

In Florida, CBD oil is taxable as TPP, unless it qualifies for a medicinal product or is sold by a Medical Marijuana Treatment Center (MMTC). Many people involved in CBD dealings believe that it qualifies for the Nontaxable Medical Items and General Grocery List. They argue that this product qualifies for health supplements, however, Florida State disagrees.

When looking at CBD oil from a sales tax perspective, it is important to note that state laws vary widely on the topic. Some states only allow usage for medical treatments. Others limit the amount of THC content that can be found in CBD. Laws are continuously being developed to maintain and tax this product.


No formal ruling has been issued to regulate CBD oil specifically. It is currently available to consumers through multiple retail locations (i.e., Vape shops and gas stations). These products can also be purchased online. New York State taxes CBD oil as Tangible Personal Property (“TPP”), stating this product does not qualify as a health supplement or medicine. Finally, retailers should note that CBD oil is not considered a form of Medical Marijuana by New York law, which is subject to a 7% excise tax.

California makes a distinct determination between CBD products that contain cannabis and ones that only have a trace amount. The cannabis excise tax is 15% charged to all cannabis retailers from distributors in California. The retailers then charge their consumers the excise tax rate as well. However, there are exemptions from sales of medicinal cannabis.

The state of Vermont “recognizes hemp as an agricultural product that may be lawfully grown as a crop, produced, possessed, and commercially traded in the state (6 VSA § 563).” It is considered to be TPP, which is subject to a 6% rate. CBD is not exempt as an agricultural supply, a drug, a food ingredient, or dietary supplement.

Selling CBD Oil

On the other hand, CBD products that are derived from the hemp plant and contain only trace amounts of THC are not subject to the cannabis excise tax. However, they are subject to sales tax as the sale of TPP.

Beginning 1/1/2019, sales of hemp-based CBD products are subject to a 3% Louisiana excise tax for retail sales (Act 247 (HB 560), Laws 2019). This tax will not replace other taxes on the good but will be adding on to other state taxes. Medicinal CBD products that are approved will not be subject to the new excise tax.

Cbd tax service

Each section of this guide contains important information relevant to cannabis businesses. The Getting Started section provides key resources related to registration, filing returns, account maintenance, and other information cannabis business may need.

How to Use This Guide

Effective January 1, 2018, a 15-percent excise tax is imposed upon retail purchasers of all cannabis and cannabis products, including medicinal cannabis, and distributors are required to calculate and collect the amount of excise tax due on the cannabis or cannabis products they supply to you. The 15-percent excise tax is calculated based on the average market price of cannabis or cannabis products sold in a retail sale. Please refer to the heading, Average Market Price, below for more information. As a retailer, you are required to pay the cannabis excise tax to your distributor and collect the cannabis excise tax from your customers. No cannabis and/or cannabis products may be sold unless the cannabis excise tax is paid by the purchasers (consumers) at the time of sale.

Supplies, Equipment, and other Business Expenses

Claims for refund must state the specific reason(s) for the overpayment, specify the period for which you are making the claim, and the amount of the overpayment. We may request documentation to support your claim, including proof that the amount requested has been refunded to the cultivator who paid it, before the claim for refund is processed.