Reporting and paying taxes is a required and integral part of the commercial cannabis business activities. The taxes received cover the costs for the local cannabis program to operate. All cannabis taxes are subject to significant penalties and interest resulting from non-compliance. Failure to comply with regulations may also result in the loss of a local permit. 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.
Cannabis Business Tax – Nevada County website
Annual Registration Form
Quarterly Tax Return
Request for Relief
Annual Registration
Cannabis businesses need to register with the County Tax Collectors office each year.
Registration forms are due upon receiving a license and/or permit and annually thereafter by July 31.
Quarterly Tax Returns
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
1st Quarter (July 1 through September 30) – due by October 31
2nd Quarter (October 1 through December 31) – due by January 31
3rd Quarter (January 1 through March 31) – due by April 30
4th Quarter (April 1 through June 30) – 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 2456 also established that persons engaging in permitted commercial cannabis cultivation shall not pay less than the following amounts.
The minimum tax is based on the number of growing cycles harvested each fiscal year and the square footage of each growing cycle harvested, which are reported on the registration form.
A minimum tax of $1,250.00 per growing cycle, each fiscal year, for persons cultivating less than or equal to 2,500 square feet of cannabis canopy.
A minimum tax of $2,500.00 per growing cycle, each fiscal year, for persons cultivating more than 2,500 square feet but less than or equal to 5,000 square feet of cannabis canopy.
A minimum tax of $5,000.00 per growing cycle, each fiscal year, for persons cultivating more than 5,000 square feet of cannabis canopy.
Annual Minimum Tax Due Date (Annual True-Up)
At the end of the fiscal year, the Tax Collector’s office will perform an annual true-up to the set minimums based on cycles and square footage that are authorized in the Ordinance.
The true-up process will look at the overall square footage per cycle and combine multiple cycles to allow for more fairness in how the law is applied.
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 the due date on the invoice to avoid additional fees.