Article: What Boston Cannabis Business Owners Need to Know About Tax Law

Article: What Boston Cannabis Business Owners Need to Know About Tax Law

Kevin Thorn writes…..Do you own a cannabis business in Massachusetts? A well-versed Boston tax attorney explains what you need to know about the tax laws related to cannabis. 1. Massachusetts Imposes Sales and Excise Taxes on Cannabis Products At the state level in Massachusetts, there are two taxes that apply to the sale of cannabis products. These are: (i) the state sales tax of 6.25 percent; and, (ii) an additional state “excise” tax of 10.75 percent. Cannabis businesses must collect both of these taxes at the time of sale, and they must timely remit these taxes to the Massachusetts Department of Revenue (DOR). 2. Local Sales Taxes Can Be Up to Three Percent Depending on where exactly your cannabis business is located, you may have to collect and remit a local sales tax as well. Local sales tax rates vary by jurisdiction, and can be as high as three percent of the retail price of goods sold. 3. You Do Have to Pay Federal Income Tax on Cannabis Sales Even though marijuana is still illegal at the federal level, cannabis businesses in Massachusetts must report their income to the Internal Revenue Service (IRS)—and this presents a number of potential challenges. For example, since federal law prohibits the sale of cannabis products, it is illegal to deduct business expenses related to cannabis sales even though you have to report (and pay tax) on the income from these sales. However, some of your business expenses may still be deductible on your company’s federal return, and you can deduct all…

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Source : CANNANNEW REPORT
Link to original : Article: What Boston Cannabis Business Owners Need to Know About Tax Law
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