Under AB 1741 (Ch. 18-228), California will temporarily waive the electronic payment requirements for licensed cannabis sellers’ payments of:
- Cannabis excise taxes;
- Cannabis cultivation taxes; and
- Sales and use taxes.
This means sellers will not be subject to penalties for making cash payments of these taxes. The waiver of the electronic payment requirement extends until January 1, 2022.
Because federal law classifies cannabis as a Schedule 1 drug, most banks do not allow cannabis businesses to open bank accounts. Therefore, most cannabis businesses must operate and pay taxes in cash and electronic payment exemptions make it easier for these businesses to pay their California taxes.