California wants marijuana shops to pay back taxes

As one of California’s pioneering marijuana dispensaries, the Berkeley Patients Group served thousands of medical marijuana users and handled tens of millions of dollars in pot transactions a year.

But until 2007, the dispensary didn’t charge customers sales taxes nor did it pay them to the state, contending that marijuana as medicine wasn’t taxable.

California tax officials, strapped for cash, disagreed and now the State Board of Equalization is ordering the Berkeley facility to pay $6.4 million in back taxes and interest on $51 million in pot sales between 2004 and 2007.

The case is illuminating efforts by the state – plus Sacramento and other cities – to collect revenue from California’s burgeoning medical cannabis industry.

Since last October, the state tax board has completed audits on 32 other marijuana dispensaries, demanding $4.5 million in sales taxes and interest.

In September, the board ordered another Berkeley medical marijuana outlet, Community Flavor, to pay $600,000 in taxes and interest on $4.9 million in marijuana and $670,000 in pot cookie sales the dispensary argued were exempt from taxes between 2005 and 2008.

“It is our intent to identify where there could be a problem and then aggressively go in and enforce the law,” said BOE Chairman Jerome Horton. “You will see a lot more investigations to assist them in complying with law.”

The BOE estimates it takes in $57 million to $105 million in sales taxes as dispensaries ring up as much as $1.3 billion in annual pot transactions.
via : The Bellingham Herald

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