Medical marijuana businesses are now allowed to pay sales tax with cash since most banks won’t provide services to them. The BOE is hoping to bring “underground sellers” out of the shadows as well as individuals starting medical marijuana businesses. The BOE is also allowing these medical marijuana businesses to use a DBA (Doing Business As), and accept personal checks as payment for the business tax liability.
Medical cannabis businesses are required to pay sales taxes to the Board of Equalization in California. In the past there were a number of businesses that did not collect or pay sales tax. Some collectives argue they don’t owe taxes while other just don’t pay the. The BOE came out with a memo specifically addressing this issue in 2007. Prior to 2005 the BOE would not issue a resellers permit for the sale of illegal substances.
The Board of Equalization is working in many different areas including investing, auditing and accommodating cash businesses. As a result, they have to face a wide range of challenges. Cash businesses who don’t maintain records or books will not be given any leeway and have to pay their taxes in the same way as non-cash based businesses.
The BOE is working hard to share knowledge about the tax payment methods among medical cannabis operators. The Chairman Horton plays a major role behind these programs. He has taken the initiative to organize a Medical Cannabis Telephone Town Hall and a Business Seminar in the upcoming weeks. Both these events will be open to medical cannabis operators who are working in Los Angeles area. By participating in these sessions, individuals will learn about the federal and state requirements along with answers to several frequently answered questions. The BOE will also teach attendees the correct method to register a new business. Moreover, Chairman Horton will be organizing a series of online tutorials for the convenience of operators who are not in a position to attend the above mentioned sessions.