Plain English Breakdown
The official text does not specify an effective date beyond stating it takes effect immediately as a tax levy, though specific rate dates are provided.
Cannabis Excise Tax Rate Suspension and Report Requirement
This law keeps the cannabis excise tax at 19% until September 2025, lowers it to 15% through June 2028, requires future adjustments based on past revenue targets starting in fiscal year 2028–29 with a 19% cap, and orders state agencies to submit an analysis report by October 2027.
What This Bill Does
- Keeps the cannabis excise tax rate at 19% from July 1, 2025, through September 30, 2025.
- Lowers the cannabis excise tax rate to 15% starting October 1, 2025, and keeps it there until June 30, 2028.
- Requires the Department of Tax and Fee Administration (CDTFA) to adjust the tax rate every two years beginning in fiscal year 2028–29 based on revenue that would have been collected under a former cultivation tax.
- Sets a maximum limit of 19% for any future excise tax adjustments made under this rule.
- Requires the Department of Cannabis Control (DCC), working with CDTFA and the Legislative Analyst's Office, to submit a report to the Legislature by October 1, 2027.
Who It Names or Affects
- Purchasers who buy cannabis or cannabis products in California.
- Cannabis retailers that collect excise taxes on sales.
- The Department of Cannabis Control (DCC).
- The California Department of Tax and Fee Administration (CDTFA).
Terms To Know
- Excise tax
- A specific tax added to the price of certain goods, such as cannabis products sold in stores.
- Cultivation tax
- A former tax on harvested cannabis that was discontinued starting July 1, 2022.
Limits and Unknowns
- The exact tax rate for fiscal year 2028–29 and beyond depends on future calculations by the department.
- The report required in October 2027 will analyze effects but does not guarantee specific changes to the law.