The Los Angeles Office of Finance – Alert:Cannabis Business Activity Taxation Switching to Monthly

The Office of Finance is responsible for ensuring the success of the Los Angeles economy by supporting entrepreneurs and business owners alike. By collecting Business Tax, we can support the essential services the city provides. As of March 2017, in an effort to continue as a leader in innovation and economic development, the City of Los Angeles began to regulate cannabis-related activity. The Office of Finance has made great strides in order to support these businesses in a timely, innovative, and effective manner.
Beginning July 1, 2019, business taxation of cannabis activities will change from quarterly reporting to MONTHLY reporting, per Chapter II, Section 21.51(d) and 21.52 (d) of the LAMC.
So what does this mean?
The existing quarterly business tax classifications (L701, L702, L703, L704, L706 & L708) will cease to exist on that date and will be replaced by the following tax classifications:

Classification (Monthly)

Activities Taxed

Tax Rate

L711 – Medical Cannabis Sales
All sales related to medical use cannabis by Retail or Microbusiness operations.
$50 per $1,000 in Gross Receipts
L712 – Adult-Use Cannabis Sales
All sales related to adult or recreational cannabis use by Retail or Microbusiness operations.
$100 per $1,000 in Gross Receipts
L713 – Cannabis Transportation
Transportation or delivery of cannabis products.
$10 per $1,000 inn Gross Receipts
L714 – Cannabis Testing
Activities related to the testing of cannabis products.
$10 per $1,000 in Gross Receipts
L716 – Cannabis Cultivation
Wholesale sales related to the cultivation of cannabis.
$20 per $1,000 in Gross Receipts
L718 – Cannabis Miscellaneous
Sales related to all other cannabis activities such as manufacturing and packaging.
$20 per $1,000 in gross Receipts
In order to be compliant, businesses that received their temporary license approval from the Department of Cannabis Regulation (DCR) are required to file their business tax and keep their account in good standing, per Chapter X, Section 104.12 (c) of the LAMC.
The first MONTHLY reporting is due August 1, 2019 and delinquent after September 3, 2019.
Any individuals or businesses that would like to become a licensed cannabis retailer may visit the Department of Cannabis Regulations website at cannabis.lacity.org.

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