Cannabis Business Tax Information

Income Tax

A cannabis business files income tax returns just like other businesses. Differences may include deductions, credits, and unique payment and record keeping methods. Different business types have specific tax requirements. The business type (entity type) you choose impacts the types of deductions and credits you can take.

For more information about California income tax for cannabis business activities, visit Franchise Tax Board’s (FTB) Cannabis business income tax page.

Sales, Use and Cannabis Taxes

If you operate a cannabis business in California, you generally are required to register and file tax returns with the California Department of Tax and Fee Administration (CDTFA).

For more information about the requirements that apply to your business, visit CDTFA’s Tax Guide for Cannabis Businesses.

Payroll Taxes

California businesses that hire employees to perform services are required by law to withhold, report, and pay payroll taxes.

For information about cannabis industry payroll tax and reporting, visit the Employment Development Department’s (EDD) Cannabis Industry Payroll Tax Reporting page.