Recently, numerous clients have come to us about issues with cannabis payment plans and the California Department of Tax and Fee Administration (“CDTFA“). Recall, there was a time in California (not that long ago) where certain cannabis companies threatened to just not pay their taxes because they believed the tax rate was too high.
In recent months, California enacted some tax reform that provides a modicum of relief to cultivators (it really just shifts the tax burden predominantly to retailers while eliminating the cultivation tax), but that hasn’t been enough to help cannabis businesses fend off an overall inability to timely and fully pay all cannabis and excise taxes. What’s happening then is that cannabis businesses are finding themselves faced with the prospect of trying to get on payment plans with CDTFA for the balance owed, which includes interest and penalties. If you’re flirting with getting on a CDTFA cannabis payment plan (because, I can assure you, just not paying your taxes will not work), here’s what you need to know:
CDTFA is not cutting any sweetheart deals with cannabis businesses. Quite the opposite. CDTFA is following established law and policy when taxes go unpaid. Cannabis isn’t getting special
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