CDTFA Excise Tax Flowcharts

CDTFA Excise Tax Flowcharts

CDTFA Excise Tax Flowcharts

Several months ago, we published two articles…

Reporting Collection CA Cannabis Taxes

Reporting collection CA cannabis taxes are highlighted in this post.  The material that follows was prepared to illustrate the computation, collection and remittance of California’s cannabis excise taxes, and the computation of the gross profit for the parties to a cannabis business transaction, in the simplest of commercial cannabis transactions – the regulated commercial

CDTFA Excise Tax Flowcharts
Calculating Reporting CA Cannabis Taxes

movement of flower from the cultivator to a dispensary.  The sole difference between the two examples of the commercial movement the flower is the number of parties involved.  In the first example, the flower is sold by a cultivator to a distributor that in turn sells the flower to a dispensary.  In the second example, the cultivator sells to a distributor that sells to a second distributor that in turn sells to the dispensary.  The total of the costs incurred in the movement of the flower is the same in both examples as is the total profit shared by the cultivator and the distributor or distributors.

and the second was

CA Cannabis Excise Tax – Extraction – Processing

This post is the second in a series of posts we expect to publish related to CA Cannabis Excise Tax – Extraction – Processing.  Our previous post focused on a simple example involving the collection,

CDTFA Excise Tax Flowcharts
California Dept. of Tax and Fee Administration

reporting, and remittance of California’s Cannabis Excise Tax (“CET”) related to flower, it was complicated. When we begin to move to extraction, processing, and distribution, the complexity expands, almost exponentially.  We continue to be amazed by the number of comments relating to the CET that merely regurgitate information published by the California Department of Tax and Fee Administration [“CTDFA”]. The example in this post illustrates some of the inadequacies of the CDTFA’s analysis and propose some solutions.  The inadequacies of CDTFA’s analysis are principally the product of:

  • The failure of CDTFA to address the realities of the cannabis supply chain.
  • The failure of CDTFA to address the complexities of the calculation of CET.

We had engaged with CDTFA in a number of discussions in connection with the topic, and in coming posts will share what we learned. We can’t be sure but will speculate that those discussions are connected with these new flowcharts.

 

 

Author: abizcannabis

Managing Director & CEO of integrated transactional financial advisory, tax, and technology consulting firm - aBIZinaBOX Inc New York, Chicago, and OaklandCPA.CITP.CISM.CGEIT.CGMAExpertise with: Alt. Investments/Private Equity, Real Estate, Professional Services, CA Cannabis, Tech Start-Ups and Distressed Assets/DebtTechnology Certifications including:Advanced & High Complexity Cloud Integrator AICPA PCPS, CAQ,, IMTA, CITP ISACA CGEIT, CISMState CPA Societies in California, Florida, Illinois, New York and TexasExpertise with Regulatory Compliance - US - HIPAA, FINRA, SEC Rule 17(a)(3)/(4), eDiscovery, FINCEN - EU- EBA, ESMA, EIOPA UK - BoE, PRA, FCA