Cannabis Business Tax
How to Pay Online
1. Pay online with a credit card, debit card or E-Check.
2. Enter your permit number in the registration field.
3. Mail, email or drop off the Quarterly Return and METRC data associated with the payment.
Please note: There is a 2.38% processing fee for credit/debit card payments. E-Checks are free.
Other Payment Methods
All payments must include a Quarterly Return and METRC data (e.g., Transportation Manifest)
1. Mail checks to: Nevada County Tax Collector, PO Box 128, Nevada City, CA 95959
2. Drop checks off in our drop box located at: 950 Maidu Ave, Nevada City, CA 95959
3. For cash payments, please call (530) 265-1285 to schedule an appointment.
How to Submit Forms1. Email forms to: CannabisTax@co.nevada.ca.us
2. Mail forms to: Nevada County Tax Collector, PO Box 128, Nevada City, CA 95959
3. Drop forms off in our drop box located at: 950 Maidu Ave, Nevada City, CA 95959
4. Fax forms to (530) 265-9857
What is Considered a Cannabis Business?
On November 6, 2018, the voters in the unincorporated area of the County of Nevada passed Measure G, which defined "Cannabis Business" as any business activity relating to cannabis, including but not limited to cultivating, transporting, distributing, manufacturing, compounding, converting, possessing, processing, preparing, storing, packaging, labeling, delivering, testing, dispensing, and selling (retail or wholesale sales) of cannabis, cannabis products, or of any ancillary products and accessories, whether or not carried on for gain of profit.
What is the Cannabis Business Tax?
"Cannabis Business Tax" is defined as the tax due pursuant to Ordinance 2456 for engaging in cannabis business in the unincorporated area of the County. The Ordinance established that the initial Cannabis Business Tax base rate is 2.5% of Gross Receipts, which is due on a quarterly basis. This rate went into effect on January 1, 2019 and is set until June 30, 2021.
In addition to the tax base rate of 2.5% of Gross Receipts, Ordinance 2456 also established that persons engaging in permitted commercial cannabis cultivation shall not pay less than the following amounts. Minimum tax is based on number of grow cycles each fiscal year, and the square footage of each grow cycle, which are reported on the Registration Form.
1. Persons cultivating less than or equal to 2,500 square feet of cannabis canopy shall pay a cannabis business tax of no ness than $1,250.00 per growing cycle.
2. Persons cultivating more than 2,500 square feet but less than or equal to 5,000 square feet of cannabis canopy shall pay a cannabis tax of no less than $2,500.00 per growing cycle.
3. Persons cultivating more than 5,000 square feet of cannabis canopy shall pay a cannabis business tax of no less than $5,000.00 per growing cycle.
Minimum tax due will not change based on sales. However, all quarterly payments received will count towards the minimum due for that fiscal year. At the end of the fiscal year, the Tax Collector's office will perform a true-up process which will look at overall square footage per cycle and combine multiple cycles to allow for more fairness in how the law is applied.
The 2.5% gross receipt tax is due to the County on all transactions entered into by such a business whose situs address (physical location) is located in the unincorporated area, regardless of where the sale transaction occurs. The IRS defines gross receipts as, “the total amounts the organization received from all sources during its accounting period, without subtracting any costs or expenses.”
Cannabis Business Requirements
1. Annually: Complete and submit a Cannabis Tax Registration Form upon approval and annually thereafter by July 31, or if any changes to cycles or square footage occur during the fiscal year.
2. Quarterly: Complete and submit a Quarterly Return by the due date each quarter, regardless if sales occur or not. If sales do occur, METRC data (e.g. transportation manifest) must also be submitted along with payment in full for taxes due.
Quarterly Reporting Periods and Due Dates
If any sales occur, payment in full and METRC data (e.g. transportation manifest) must be received with the Quarterly Return by the due dates below.
What Documentation is Needed for Submittals?If there are any sales being reported, then Quarterly Returns must include payment in full (with penalties and interest, if applicable) as well as METRC data (e.g. transportation manifest) showing the product was transferred and traced at the state level. If there were no sales, then no additional documentation is needed with the Quarterly Return.
What if No Sales Occur?Quarterly Returns are due by the end of the month following the end of the reporting period and Cannabis Business Operators must submit a Quarterly Return by the due date each quarter, even if no sales occurred.
Penalties and Interest for Delinquent Taxes
Why Report and Pay Cannabis Taxes?
Reporting and paying taxes is an integral part of commercial business activities and contributes to the community in which it operates. All cannabis taxes are subject to significant penalties and interest resulting from non-compliance. Failure to comply with regulations may also result in fines and disciplinary actions. For more information on local requirements, refer to Ordinance 2456. For more information on state requirements, refer to the Medicinal and Adult-Use Cannabis Regulation and Safety Act.