Revises provisions governing the taxation of sales of cannabis and cannabis products. (BDR 32-149)

REQUIRES TWO-THIRDS MAJORITY VOTE (§ 5)

A.B. 307

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ASSEMBLY BILL NO. 307–ASSEMBLYMEMBERS
GALLANT, COLE; AND GONZÁLEZ

FEBRUARY 27, 2025
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Referred to Committee on Revenue

SUMMARY—Revises provisions governing the taxation of sales of
cannabis and cannabis products. (BDR 32-149)

FISCAL NOTE: Effect on Local Government: May have Fiscal Impact.
Effect on the State: Yes.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

AN ACT relating to taxation; eliminating the excise taxes on
wholesale sales of cannabis; increasing the amount of the
excise tax on retail sales of cannabis and cannabis
products; revising the manner in which the revenues from
the excise tax on retail sales of cannabis and cannabis
products must be distributed; and providing other matters
properly relating thereto.
Legislative Counsel’s Digest:
Existing law imposes an excise tax upon the first wholesale sale of cannabis by 1
a medical cannabis cultivation facility or an adult -use cannabis cultivation facility 2
to another cannabis establishment at the rate of 15 percent of: (1) the fair market 3
value at wholesale for sales made to an affiliate of the medical cannabis cultivation 4
facility or adult -use cannabis cultivation facility; or (2) the sales price of the 5
cannabis, if the sale is made to a cannabis establishment that is not an affiliate of 6
the medical cannabis cultivation facility or adult-use cannabis cultivation facility . 7
Existing law requires the revenues collected from those excise taxes to be 8
distributed: (1) to the Cannabis Compliance Board and to local governments in an 9
amount determined to be necessary by the Board to pay the costs of the Board and 10
local governments in car rying out the provisions of existing law governing the 11
medical and adult use of cannabis; and (2) if any money remains, to the State 12
Treasurer to be deposited to the credit of the State Education Fund. (NRS 13
372A.290) Section 5 of this bill eliminates those excise taxes on wholesale sales of 14
cannabis. 15
Existing law imposes an excise tax on each retail sale of cannabis or cannabis 16
products by an adult -use cannabis retail store or cannabis consumption lounge at 17
the rate of 10 percent of the sales price of the cannabis or cannabis products. Under 18
existing l aw, the revenues collected from that excise tax are required to be paid 19
over as collected to the State Treasurer to be deposited to the credit of the State 20

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Education Fund. (NRS 372A.290) Section 5 increases the amount of the excise tax 21
on retail sales of cannabis and cannabis products from 10 percent to 14.25 percent 22
of the sales price of the cannabis or cannabis products. Section 5 additionally 23
requires the revenues from that excise tax to be distributed: (1) to the Cannabis 24
Compliance Board in an amount determined to be necessary by th e Board to pay 25
the costs o f the Board in carrying out the provisions of existing law governing the 26
medical and adult use of cannabis; and (2) if any money remains, to the State 27
Treasurer to be deposited to the credit of the State Education Fund. 28
Sections 1-4 of this bill revise provisions relating to the excise tax on cannabis 29
to reflect the elimination of the excise taxes on wholesale sales of cannabis in 30
section 5. Section 6 of this bill revises provisions setting forth the sources of 31
revenue for the State Education Fund to eliminate references to the excise taxes on 32
wholesale sales of cannabis. Section 7 of this bill repeals provisions requiring the 33
Department of Taxation to establish procedures to determine the fair market value 34
at wholesale of cannabis, which are rendered obsolete by section 5. 35

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. NRS 360.2937 is hereby amended to read as 1
follows: 2
360.2937 1. Except as otherwise provided in this section, 3
NRS 360.320 or any other specific statute, and notwithstanding the 4
provisions of subsection 1 of NRS 360.2935, interest must be paid 5
upon an overpayment of any tax provided for in chapter 362, 363A, 6
363B, 363C, 363D, 369, 370, 372, 372B, 374, 377, 377A, 377C or 7
377D of NRS, [any of ] the [taxes] tax provided for in NRS 8
372A.290, any fee provided for in NRS 444A.090, 482.313, 9
482C.230 or 482C.240, or any assessment provided for in NRS 10
585.497, at the rate of 0.25 percent per month from the last day of 11
the calendar month following the period for which the overpayment 12
was made. 13
2. No refund or credit may be made of any interest imposed on 14
the person making the overpayment with respect to the amount 15
being refunded or credited. 16
3. The interest must be paid: 17
(a) In the case of a refund, to the last day of the calendar month 18
following the date upon which the person making the overpayment, 19
if the person has not already filed a claim, is notified by the 20
Department that a claim may be filed or the date upon which the 21
claim is certified to the State Board of Examiners, whichever is 22
earlier. 23
(b) In the case of a credit, to the same date as that to which 24
interest is computed on the tax or the amount against which the 25
credit is applied. 26

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Sec. 2. NRS 360.417 is hereby amended to read as follows: 1
360.417 Except as otherwise provided in NRS 360.232 and 2
360.320, and unless a different penalty or rate of interest is 3
specifically provided by statute, any person who fails to pay any tax 4
provided for in chapter 362, 363A, 363B, 363C, 363D, 369, 370, 5
372, 372B, 374, 377, 377A, 377C, 377D, 444A or 585 of NRS, [any 6
of] the [taxes] tax provided for in NRS 372A.290, or any fee 7
provided for in NRS 482.313, 482C.230 or 482C.240, and any 8
person or governmental entity that fails to pay any fee provided for 9
in NRS 360.787, to the State or a county within the time required, 10
shall pay a penalty of not more than 10 percent of the amount of the 11
tax or fee which is owed, as determined by the Department, in 12
addition to the tax or fee, plus interest at the rate of 0.75 percent per 13
month, or fraction of a month, from the last day of the month 14
following the period for which the amount or any portion of the 15
amount should have been reported until the date of payment. The 16
amount of any penalty imposed must be based on a graduated 17
schedule adopted by the Nevada Tax Commission which takes into 18
consideration the length of time the tax or fee remained unpaid. 19
Sec. 3. NRS 372A.220 is hereby amended to read as follows: 20
372A.220 “Excise tax on cannabis” means [any of] the excise 21
[taxes] tax imposed by NRS 372A.290. 22
Sec. 4. NRS 372A.250 is hereby amended to read as follows: 23
372A.250 “Taxpayer” means : [a:] 24
1. [Cannabis cultivation facility; 25
2. Adult-use] An adult-use cannabis retail store; or 26
[3. Cannabis] 27
2. A cannabis consumption lounge. 28
Sec. 5. NRS 372A.290 is hereby amended to read as follows: 29
372A.290 1. [An excise tax is hereby imposed on the first 30
wholesale sale in this State of cannabis by a medical cannabis 31
cultivation facility to another cannabis establishment at the rate of 32
15 percent of: 33
(a) The fair market value at wholesale of the cannabis, if the sale 34
is made to an affiliate of the medical cannabis cultivation facility; or 35
(b) The sales price of the cannabis, if the sale is made to a 36
cannabis establishment that is not an affiliate of the medical 37
cannabis cultivation facility. 38
 The excise tax imposed pursuant to this subsection is the 39
obligation of the medical cannabis cultivation facility. 40
2. An excise tax is hereby imposed on the first wholesale sale 41
in this State of cannabis by an adult -use cannabis cultivation facility 42
to another cannabis establishment at the rate of 15 percent of: 43

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(a) The fair market value at wholesale of the cannabis, if the sale 1
is made to an affiliate of the adult -use cannabis cultivation facility; 2
or 3
(b) The sales price of the cannabis, if the sale is made to a 4
cannabis establishment that is not an affiliate of the adult -use 5
cannabis cultivation facility. 6
 The excise tax imposed pursuant to this subsection is the 7
obligation of the adult-use cannabis cultivation facility. 8
3.] Except as otherwise provided in subsection [8,] 3, an excise 9
tax is hereby imposed on each retail sale in th is State of cannabis or 10
cannabis products by an adult -use cannabis retail store or cannabis 11
consumption lounge at the rate of [10] 14.25 percent of the sales 12
price of the cannabis or cannabis products. The excise tax imposed 13
pursuant to this subsection: 14
(a) Is the obligation of the seller of the cannabis or cannabis 15
product but may be recovered from the purchaser. 16
(b) Is separate from and in addition to any general state and 17
local sales and use taxes that apply to retail sales of tangible 18
personal property. 19
[4.] 2. The revenues collected from the excise tax imposed 20
pursuant to subsection 1 must be distributed: 21
(a) To the Cannabis Compliance Board [and to local 22
governments] in an amount determined to be necessary by the Board 23
to pay the costs of the Boar d [and local governments ] in carrying 24
out the provisions of [chapter] chapters 678C and 678D of NRS; 25
and 26
(b) If any money remains after the revenues are distributed 27
pursuant to paragraph (a), to the State Treasurer to be deposited to 28
the credit of the State Education Fund. 29
[5. The revenues collected from the excise tax imposed 30
pursuant to subsection 2 must be distributed: 31
(a) To the Cannabis Compliance Board and to local 32
governments in an amount determined to be necessary by the Board 33
to pay the costs of the Board and local governments in carrying out 34
the provisions of chapter 678D of NRS; and 35
(b) If any money remains after the revenues are distributed 36
pursuant to paragraph (a), to the State Treasurer to be deposited to 37
the credit of the State Education Fund. 38
6. For the purpose of subsections 4 and 5, a total amount of 39
$5,000,000 of the revenues collected from the excise tax imposed 40
pursuant to subsection 1 and the excise tax imposed pursuant to 41
subsection 2 in each fiscal year shall be deemed sufficient to pay the 42
costs of all local governments to carry out the provisions of chapters 43
678C and 678D of NRS. The Board shall, by regulation, determine 44
the manner in which local governments may be reimbursed for the 45

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costs of carrying out the provisions of ch apters 678C and 678D of 1
NRS. 2
7. The revenues collected from the excise tax imposed pursuant 3
to subsection 3 must be paid over as collected to the State Treasurer 4
to be deposited to the credit of the State Education Fund. 5
8.] 3. The excise tax imposed pursuant to subsection [3] 1 does 6
not apply to a sale of cannabis for the medical use of cannabis or a 7
medical cannabis product to the holder of a registry identification 8
card or letter of approval by an adult -use cannabis retail store that 9
has been deemed to be a dual licensee pursuant to NRS 678D.490. 10
[9.] 4. As used in this section: 11
(a) [“Adult-use cannabis cultivation facility” has the meaning 12
ascribed to it in NRS 678A.025. 13
(b) “Affiliate” means a person who, directly or indirectly 14
through one or mo re intermediaries, controls, is controlled by or is 15
under common control with, a specified person. 16
(c)] “Cannabis product” has the meaning ascribed to it in 17
NRS 678A.120. 18
[(d)] (b) “Letter of approval” has the meaning ascribed to it in 19
NRS 678C.070. 20
[(e) “Local government” has the meaning ascribed to it in 21
NRS 360.640. 22
(f) “Medical cannabis cultivation facility” has the meaning 23
ascribed to it in NRS 678A.170. 24
(g) “Medical cannabis establishment” has the meaning ascribed 25
to it in NRS 678A.180. 26
(h)] (c) “Medical cannabis product” has the meaning ascribed to 27
it in NRS 678A.200. 28
[(i)] (d) “Medical use of cannabis” has the meaning ascribed to 29
it in NRS 678A.215. 30
[(j)] (e) “Registry identification card” has the meaning ascribed 31
to it in NRS 678C.080. 32
[(k) “Wholesale sale” means the first sale or transfer of cannabis 33
by a cannabis cultivation facility to another cannabis establishment. 34
The term does not include a transfer of cannabis by a cannabis 35
cultivation facility to another cannabis cultivation facility when both 36
cannabis cultivation facilities share identical ownership.] 37
Sec. 6. NRS 387.1212 is hereby amended to read as follows: 38
387.1212 1. The State Education Fund is hereby created as a 39
special revenue fund to be administered by the Superintendent of 40
Public Instruction for the purpose of supporting the operation of the 41
public schools in this State. The interest and income earned on the 42
money in the Fund, excluding the direct legislative appropriation 43
from the State General Fund required by subsection 3, must, after 44
deducting any applicable charges, be credited to the Fund. 45

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2. Money which must be deposited for credit to the State 1
Education Fund includes, without limitation: 2
(a) All money derived from interest on t he State Permanent 3
School Fund, as provided in NRS 387.030; 4
(b) The proceeds of the tax imposed pursuant to NRS 244.33561 5
and any applicable penalty or interest, less any amount retained by 6
the county treasurer for the actual cost of collecting and 7
administering the tax; 8
(c) The proceeds of the tax imposed pursuant to subsection 1 of 9
NRS 387.195; 10
(d) The money identified in subsection 9 of NRS 120A.610; 11
(e) The portion of the money in each special account created 12
pursuant to subsection 1 of NRS 179.1187 which is identified in 13
paragraph (d) of subsection 2 of NRS 179.1187; 14
(f) The money identified in paragraph (d) of subsection 6 of 15
NRS 278C.250; 16
(g) The money identified in subsection 1 of NRS 328.450; 17
(h) The money identified in subsection 1 of NRS 328.460; 18
(i) The money identified in paragraph (a) of subsection 2 of 19
NRS 360.850; 20
(j) The money identified in paragraph (a) of subsection 2 of 21
NRS 360.855; 22
(k) The money required to be transferred to the State Education 23
Fund pursuant to NRS 362.100; 24
(l) The money required to be deposited to the credit of the State 25
Education Fund pursuant to subsection 4 of NRS 362.170; 26
(m) [The portion of the proceeds of the tax imposed pursuant to 27
subsection 1 of NRS 372A.290 identified in paragraph (b) of 28
subsection 4 of NRS 372A.290; 29
(n)] The proceeds of the tax imposed pursuant to subsection [3] 30
1 of NRS 372A.290; 31
[(o)] (n) The proceeds of the fees, taxes, interest and penalties 32
imposed pursuant to chapter 374 of NRS, as transferred pursuant to 33
subsection 3 of NRS 374.785; 34
[(p)] (o) The money identified in subsection 5 of 35
NRS 445B.640; 36
[(q)] (p) The money identified in paragraph (b) of subsection 7 37
of NRS 678B.390; 38
[(r)] (q) The portion of the proceeds of the excise tax imposed 39
pursuant to subsection 1 of NRS 463 .385 identified in paragraph (c) 40
of subsection 5 of NRS 463.385; 41
[(s)] (r) The money required to be distributed to the State 42
Education Fund pursuant to subsection 3 of NRS 482.181; 43
[(t)] (s) The portion of the proceeds of the fee imposed pursuant 44
to NRS 488.075 identified in subsection 2 of NRS 488.075; 45

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[(u)] (t) The portion of the net profits of the grantee of a 1
franchise, right or privilege identified in NRS 709.110; 2
[(v)] (u) The portion of the net profits of the grantee of a 3
franchise identified in NRS 709.230; 4
[(w)] (v) The portion of the net profits of the grantee of a 5
franchise identified in NRS 709.270; 6
[(x)] (w) The money required to be distributed to the State 7
Education Fund pursuant to NRS 363D.290; 8
[(y)] (x) The amount of any fines require d to be remitted to the 9
State Treasurer for deposit to the credit of the State Education Fund 10
pursuant to subsection 1 of NRS 555.470; 11
[(z)] (y) The amount of any claim, together with any dividend, 12
interest or other increment required to be transferred to the State 13
Education Fund pursuant to subsection 2 of NRS 120A.645; 14
[(aa) The portion of the proceeds of the tax imposed pursuant to 15
subsection 2 of NRS 372A.290 identified in paragraph (b) of 16
subsection 5 of NRS 372A.290;] and 17
[(bb)] (z) The direct legi slative appropriation from the State 18
General Fund required by subsection 3. 19
3. In addition to money from any other source provided by law, 20
support for the State Education Fund must be provided by direct 21
legislative appropriation from the State General Fund in an amount 22
determined by the Legislature to be sufficient to fund the operation 23
of the public schools in this State for kindergarten through grade 12 24
for the next ensuing biennium for the population reasonably 25
estimated for that biennium. Money in t he State Education Fund 26
does not revert to the State General Fund at the end of a fiscal year, 27
and the balance in the State Education Fund must be carried forward 28
to the next fiscal year. 29
4. Money in the Fund must be paid out on claims as other 30
claims against the State are paid. 31
Sec. 7. NRS 678B.640 is hereby repealed. 32
Sec. 8. This act becomes effective on July 1, 2025. 33

TEXT OF REPEALED SECTION

678B.640 Regulations of Department of Taxation regarding
fair market value at wholesale of cannabis.
1. The Department of Taxation shall adopt regulations to
establish procedures to determine the fair market value at wholesale
of cannabis. The regulations shall:
(a) Provide that the fair market value of cannabis:

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(1) Will be calculated and published by the Department on a
quarterly basis not more than 30 days after the end of each calendar
quarter; and
(2) Is the median sales price for wholesale sales between
cannabis cultivation facilities and cannabis establishments that are
not affiliates, per pound or each, during the period specified in
subparagraph (1).
(b) Prescribe any information required by the Department to
determine the fair market value at wholesale of cannabis.
2. The Board shall ensure that any computer software used for
the seed-to-sale tracking of cannabis adopted by the Board includes
a method to denote transfers of cannabis between affiliates.
3. The Board shall furnish the Department with such
information as the Department determines to be necessary to adopt
the regulations required by this section.
4. As used in this section, “affiliate” has the meaning ascribed
to it in NRS 372A.290.

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