New Retail Taxes for CA Jan 2023
Beginning January 1, 2023, the responsibility for collecting and paying the cannabis excise tax to the California Department of Tax and Fee Administration (CDTFA) shifts from distributors to cannabis retailers.
The BLAZE in house compliance team is already working on updating our POS to serve your needs when these updates occur. We will be reaching out again before this goes into effect with more information for you on how your shop can stay compliant from day one.
What’s changing:
- The responsibility for collecting and paying the cannabis excise tax to the California Department of Tax and Fee Administration (CDTFA) shifts from Distributors to Cannabis Retailers starting January 1, 2023. The exact details and regulations are not fully final as of the writing of this email.
- For Retail Deliveries, the DCC will require a manifest for all retail deliveries starting January 1, 2023. While the DCC has stated it will enforce this on January 1, 2023, they have yet to provide detailed guidance on this.
What is BLAZE doing:
- Our compliance team is in communication with both the DCC and CDTFA to gather details as soon as they become available. We have multiple contacts we are working with to ensure we have the best information available.
- Adjusting our tax settings to properly account for the excise tax changes starting Jan 1, 2023. This will include the elimination of any tax differentiation of what was formerly known as arms-length and Non Arms-Length transactions.
- Adding Metrc manifest creation capabilities to the application. We already utilize this functionality in multiple other states.
- Building a report that you can utilize to reconcile excise taxes paid on batches that were received before year-end but are sold after the new year.
What you need to do:
- Ensure you are filling in the Batch Received Date on all batches.
- Adjust your receipt settings by Jan 1 to include excise tax on the receipt.*
- If you are a delivery service, ensure your staff is trained on new processes to create a delivery manifest.*
- Utilize the Report created by BLAZE after the new year to reconcile any batches that you may have overpaid excise tax on.*
*BLAZE will provide more detailed information on each of these specific actions you may need to take in December.