Tax Reminders for the Marijuana Industry
As marijuana dispensaries and establishments learn and settle into a routine of filing and paying transaction privilege tax (TPT) and excise tax, the Arizona Department of Revenue wants to provide best practices and tips to comply properly.
Tips:
- Businesses can register, file, and pay TPT and excise tax on AZTaxes.gov.
- File early. Pay later with scheduled payments online with an e-check or credit/debit card (surcharge may apply). No need for paper checks or cash and avoid the electronic funds transfer penalty for not paying online.
- AZTaxes gives you the ability to view past e-filed and e-paid history.
- Filing online reduces errors with automatic calculations. Input the figures and AZTaxes does the rest.
- For quick payments, businesses can pay TPT liability on AZTaxes.gov under the “Make a Payment” link. For excise tax, you must log into your account to make a payment.
- File and pay your excise tax with your MET-1, not with your TPT as excess tax (additional tax).
- The MET-1 is available online at AZTaxes.gov for both filing and paying.
- To protect the safety for all parties involved and to expedite the process, the marijuana excise tax should be paid online via AZTaxes.gov.
- When filing an electronic MET-1, be sure that all inventories reported for this product type are reported using the same unit of measurement (i.e. grams, ounces, pounds). "Each" is not an acceptable unit of measure as "each" item contains a varying amount of THC.
- File and pay for the proper filing period and amend if a correction needs to be made.
- Businesses must file and pay beginning with the start date of their business. If you have delinquent returns, file as soon as possible to avoid further penalties.
Business Codes
Medical and adult use marijuana dispensaries should use the following business codes to file properly.
| BUSINESS CODE | DESCRIPTION | REPORTING PURPOSE |
|---|---|---|
| 017 | Retail Sales (Accessories and Ancillary Products) | Retail sales of non-marijuana tangible personal property (e.g., marijuana accessories, jars, grow lights, etc.). |
| 203 | Retail - Medical | Retail sales of medical marijuana (flower/leaf, edibles, etc.). Purchaser must have a prescription and marijuana medical card. |
| 420 | Retail - Adult Use | Retail sales of adult use marijuana and marijuana products (21+ years) (flower, edibles, etc.). |
| 030 | Use Tax From Inventory | Cost/value of items used from inventory (free product giveaways, testing, etc.). |
| 029 | Use Tax | Items purchased from an out-of-state vendor on which no Arizona TPT is collected. |
| 221* | Medical Marijuana Restaurant | Prepared food infused with medical marijuana. |
| 421* | Adult use Marijuana Restaurant | Prepared food infused with adult use marijuana. |
| 222* | Medical Marijuana Restaurant Additional Tax | “Additional Tax” means in addition to Medical Marijuana Restaurant |
| 422* | Adult Use Marijuana Restaurant Additional Tax | “Additional Tax” means in addition to Adult Use Marijuana Restaurant |
* New business codes coming soon.
Resources
The Arizona Department of Revenue (ADOR) provides support and assistance for marijuana dispensaries and establishments learning the new tax obligation. Our Customer Care and Outreach teams have contacted many marijuana dispensaries and establishments to assist with registration and walk them through the process to comply. It is recommended to call ADOR back so we can assist.
Website
The Adult Use Marijuana resource page provides information on the adult use marijuana law that requires dispensaries to begin filing and paying transaction privilege tax (TPT) and excise tax in Arizona. The online section outlines tax requirements, frequently asked questions, examples, and other helpful information.
Workshops
On Wednesday, July 28, 1 p.m. – 3:30 p.m., ADOR will be hosting a Marijuana Taxation webinar which covers industry specific topics such as how to properly license with ADOR, best practices, and how to file and pay on AZTaxes.gov.
Click here to register.
If you need further assistance with filing or paying using AZTaxes.gov, please email [email protected].
Tuesday, July 13, 2021