As the saying goes, there are two things certain in life: death and taxes. An addendum to this saying might be that taxes never seem to decrease over our lifetime. However, these three California cities have chosen to reduce cannabis taxes in their jurisdiction. Let’s take a look at these three cities and the rates at which they’ve reduced taxes.
Berkeley recently hired HdL Companies to audit and review current taxes for cannabis regulations. These services have resulted in a reduction of cannabis taxes within Berkeley. Medicinal sales tax was 5% and is now 2.5%. In addition, adult-use cannabis sales tax was 10% and is now 5%.
Salinas is the largest municipality of Monterey County, California. This city just reduced cannabis nursery tax rates from $15/square foot of canopy space to $2/square foot. If you’re taking the first steps toward starting a cannabis company, this might be a great jurisdiction for you to consider.
Grover Beach is a city located in San Luis Obispo County, California. The city recently reduced several taxes related to cannabis, including the cultivation tax from $25 per square foot to $5 per square foot. Manufacturing and distribution taxes have been reduced from 5% of gross receipts to 3%. All taxes for adult-use and medical cannabis remain the same.
Although Coalinga has not officially reduced any of its taxes, the city is looking into the idea of reducing cultivation taxes. The current cultivation tax costs all cannabis businesses at $25.00 per square foot for the first 3,000 square feet. It drops to $10 per square foot after that. We will see what Coalinga decides to do in terms of reducing cultivation taxes.
These three cities have reduced cannabis taxes, and depending on the long-term economic growth benefits, it’s likely that other districts could follow suit. We will keep you updated as we see additional cities make changes to their cannabis taxes.
Interested in opening a cannabis business of your own within one of these California cities? Contact California Cannabis CPAs today.