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California’s cannabis taxes are a disaster, with no end in sight. I’ve written about the state’s tax problems extensively, but today I want to talk about what the state can do when it comes to tax collection.
Late cannabis taxes? Get used to hefty penalties
If a licensed cannabis business fails to timely or fully pay its cannabis taxes, it will owe a substantial amount higher than the actual tax amount. Specifically, the state’s cannabis laws mandate a penalty of 50 percent of the unpaid amount, on top of the 10 percent general penalty payable for late tax payments. The same licensees will also be required to pay interest on the unpaid amounts. If you’ve ever seen a California Department of Tax and Fee Administration (CDTFA) statement of account, you may have noticed an additional charge listed as “other,” which allegedly includes miscellaneous collection fees.
Imagine a company owed $100,000 and failed to timely pay. Given the above, that same company would owe at least $160,000 (and probably closer to $170,000 or more) considering the penalties. Additionally, when I say “timely,” I mean it literally – we’ve seen the CDTFA impose penalties when
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