Cannabis Business Tax

Annual Registration

Cannabis businesses need to register with this office each year. The Registration Form provides us with important information about your business and is used to enter the business into our system and produce a certificate of tax compliance. Registration forms are due upon receiving a license and/or permit and annually thereafter by July 31. 

Square Footage Methodology

Effective July 1, 2023 each person engaged in a legally authorized commercial cannabis cultivation within the unincorporated area of Nevada County shall pay an initial annual tax of $0.16 per square foot per cycle of outdoor or mixed light tier 1 cultivation area or $0.32 per square foot per cycle of mixed-light tier 2 or indoor cultivation area. The annual registration process will remain unchanged, however, instead of Quarterly reporting and tax remittance to our office, an annual invoice with two (2) payment installments due January 12 and June 12 will be sent to you. These due dates will remain the same in subsequent years. If January 12 or June 12 fall on a Saturday, Sunday or Legal Holiday, no penalty will be charged if payment is made (or postmarked) by 5pm the next business day.

Gross Receipts Methodology 

Effective July 1, 2023,  quarterly tax returns will still be required for all other commercial cannabis business, including but not limited to those operating as a retailer, distributor, distribution facility, testing laboratory, transporter, manufacturing facility, nursery, dispensary, or engaging in the delivery of cannabis or operating as a microbusiness. Quarterly tax returns and METRC data must be submitted by the due date each quarter, even if no sales occur. If sales do occur, then payment in full must also be submitted. The County cannot accept a tax return without payment in full. Penalties and interest will accrue until full payment is received. The tax return should be filled in completely and signed by a legal officer of the company. An additional 30 days to report and submit forms and payment is allowed so that all receipts for the quarter can be accounted for. 

Quarterly Reporting Periods and Due Dates

• Quarter 1: July - September, due by October 31 
• Quarter 2: October - December, due by January 31
• Quarter 3: January - March, due by April 30
• Quarter 4: April - June, due by July 31

Penalties and Interest on Delinquent Taxes

In accordance with Ordinance 2456, when taxes are not paid on or before the due date penalties and interest are applied and will accrue until full payment is received.

Annual Minimum Cannabis Business Tax

In addition to the tax on Gross Receipts, Ordinance 2523 also established that persons engaging in all other permitted commercial cannabis businesses that fall under the Gross Receipts methodology shall be subject to a minimum tax as specified in the ordinance. 

Annual Minimum Tax Due Date

At the end of the fiscal year, the Tax Collector's office will perform an annual true-up to the set minimums as authorized in the ordinance for businesses that fall under the Gross Receipts methodology. If it is determined through the true-up process that the annual minimum tax has not been met through quarterly payments, the Tax Collector's office will send an invoice to the cannabis business for the remaining balance due. The balance due must be paid by September 30 each year to avoid additional fees.

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.