| I was curious about the details of this, so I looked it up. There's a 15% excise tax statewide in CA. It used to be a straight 15% on top of the sale price, but now it's calculated based on the average market price for an arm's length transaction.[1][2] This is usually calculated based on the wholesale price plus a markup of 60%.[3] On top of that, there's (normal) sales tax applied to the whole purchase, including the excise tax amount.[2] In California, that means a statewide sales tax of 7.25%, plus county and sometimes city sales taxes that can add on an extra 0-3.25%.[4] In places with very little additional county and city sales taxes, e.g. Newport Beach[5], that means paying 15% excise plus 7.75% sales tax, for an effective total retail tax rate of 23.9125%. In places with higher county and city sales taxes, e.g. Santa Monica [6] that means paying 15% excise plus 10.25% sales tax, for an effective total retail tax rate of 26.7875%. San Francisco is on the lower end of the middle of the pack with a sales tax of 8.5% [7], so that means the effective total retail tax rate is 24.775%. Of course, there are other cultivation taxes, use taxes, special local marijuana excise taxes and other permitting costs that apply to cultivators and distributors and retailers that may get passed along to customers[8][9][10], so you could say that "total taxes" are closer to 40%. But most retail buyers are paying about 24-28% on top of retail list price in sales + excise taxes. Note: Prop 64 made it so most medical cannabis sales aren't subject to sales tax, so medical users only have to pay the 15% excise tax. [8] [1] https://www.cdtfa.ca.gov/formspubs/l537.pdf [2] http://www.cdtfa.ca.gov/industry/cannabis.htm#Retailers [3] http://www.cdtfa.ca.gov/industry/cannabis.htm#Facts [4] https://smartasset.com/taxes/california-sales-tax [5] https://www.avalara.com/taxrates/en/state-rates/california/c... [6] https://www.avalara.com/taxrates/en/state-rates/california/c... [7] https://www.avalara.com/taxrates/en/state-rates/california/c... [8] http://www.cdtfa.ca.gov/industry/cannabis.htm#Started [9] https://www.latimes.com/projects/la-me-weed-101-tax-location... [10] http://blog.margolinlawrence.com/all-about-california-cannab... |