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Filing the Colorado Sales Tax Return (DR 0100)
Medical marijuana, medical marijuana-infused products and accessories are reported on the DR 0100. This return includes the state sales tax plus any local sales taxes. The sales tax for medical marijuana sales and accessories should be filed under the Colorado Account Number that matches with the sales tax license for medical marijuana. Sales tax for medical marijuana can also be filed electronically via Revenue Online.
Retail marijuana businesses still will be required to file the Colorado Sales Tax Return (DR 0100). Beginning with the July 1 filing period, businesses will report their overall Gross Sales and Services on line 1 (including the amount of retail marijuana and retail marijuana product sales) and claim the state exemption by subtracting sales of Retail Marijuana and Retail Marijuana Product on line 10 in Part B – Exemptions Schedule of the return, which carries over to the main return, line 3b, column 1. “Retail Marijuana” and “Retail Marijuana Products” are defined in statute and do not include other types of tangible personal property that a retail marijuana business may have for sale, including but not limited to apparel, glassware or rolling papers. Any of these other types of items sold are still subject to the 2.9% state sales tax.
Filing the Retail Marijuana Sales Tax Return
The 15% additional state sales tax on retail marijuana and retail marijuana-infused products is filed on the Retail Marijuana Sales Tax Return. Only retail marijuana and retail marijuana-infused products should be included on the Retail Marijuana Sales Tax Return. File using the same Colorado Account Number listed on your retail marijuana sales tax license.
SB17-267 removed some special districts' ability to levy sales taxes on retail marijuana sales as of July 1, 2017. SB18-088 clarified that the special districts authorized by prior voter approval to tax retail marijuana sales before July 1, 2017 may continue to do so. The Colorado General Assembly found it necessary to enact this bill to be retroactive, but not retrospective, in an effort to alleviate the unfair burden on sellers and purchasers to recover the sales tax from July 1, 2017 through February 22, 2018 (the date SB18-088 was signed into law). Therefore, retail marijuana businesses in the affected special districts will resume collecting special district sales taxes on sales of retail marijuana and retail marijuana products beginning on either May 1, 2018 or July 1, 2018, which are mutually agreed upon dates between the Department of Revenue and each of the special districts. Here is an overview of the special districts and the effective dates:
Special districts beginning to collect tax on retail marijuana on May 1, 2018:
Special districts beginning to collect tax on retail marijuana on July 1, 2018:
Return and payment are due the 20th day of the month following the reporting period. If the 20th day falls on a weekend or holiday, the due date is the next business day.
IMPORTANT: The applicable sales tax return(s) must be filed even if no sales were made or if no tax is due for the period. Returns with “zero” tax must be filed to avoid nonfiler notices and penalty assessments.
Excise tax is imposed on the first sale or transfer from a retail marijuana cultivation facility to a retail marijuana store or retail marijuana product manufacturing facility. Medical marijuana is not subject to the 15% state retail marijuana excise tax.
State Retail Marijuana Excise Tax Rate: Retail marijuana is subject to a 15% excise tax on the Average Market Rate (AMR) or contract price* of retail marijuana. The excise tax is based on the average market rate for Bud, Trim, Immature Plant, Wet Whole Plant, Seed, Bud Allocated for Extraction and Trim Allocated for Extraction. One marijuana excise tax return is required for each retail marijuana cultivation facility.
*As a result of Senate Bill 18-259 and regulation 1 CCR 201-18 section 39-28.8-302 (for more on transfers between unaffiliated cultivations and affiliated businesses), there is a narrow exception for transfers to use the contract price for calculating excise tax, specific to transfers between unaffiliated cultivation facilities transferring to affiliated retail marijuana stores or product manufacturers.
If all four of the above conditions have NOT been met, then the excise tax on the transfers is determined based on the AMR, not the contract price. The excise tax is still to be reported and paid by the cultivation facility that transferred the marijuana to the affiliated store or manufacturer.
Effective August 9, 2017:
Sales or transfers between licensed cultivation facilities are not subject to the state excise tax.
Affiliated retail marijuana businesses and unaffiliated retail marijuana businesses who do not have a contract price at the time of the sale will calculate their excise tax at 15% of the AMR. Unaffiliated retail marijuana businesses with a contract price at the time of sale will calculate their excise tax at 15% of the contract price.
See: Summary of Retail Marijuana Excise Tax Changes (Updated Dec. 22, 2017)
Follow these helpful filing instructions.
IMPORTANT: The excise tax return must be filed even if no transfers or sales were made or if no tax is due for the period. Returns with “zero” tax must be filed to avoid nonfiler notices and penalty assessments.