Cannabis Tax Reporting Guide

• Know your tax reporting and payment responsibilities (e.g., tax due date) by looking at the Filing Due Date section below.
• Mark your calendar with the tax due date. Submit your report and payment before that date to avoid being assessed late payment penalties and to ensure your payment is received on time.
• We communicate by email, phone, and by mail if needed. Check your email and voicemail for messages from LCB Tax and Fee Unit. Respond quickly to questions, missing report notices, and send in your payment as soon as you get our courtesy, balance-due statement.
• Keep your contact information current (e.g., telephone numbers, mailing, and email address).
  • Review and update your phone number if it is not current. Make sure you set up your voicemail box and check that it is not full.
  • Send an email to licensingchanges@lcb.wa.gov with license information and what should be updated or call our Licensing Customer Service staff at (360) 664-1600 (option 1) for assistance.
• Contact the Tax and Fee desk at cannabistaxes@lcb.wa.gov or (360) 664-1789 if you have questions.

Cannabis reporting and payment due dates are in yellow. Reports and payments are due on or before the 20th of the next month following completed sales. If the 20th falls on a weekend or a holiday, the next business day is the tax due date. 

• RCW 69.50.535
  • Cannabis excise tax, reports, state and federal anti-trust laws.
• RCW 69.50.565
  • Unpaid trust fund taxes, liabilities and administrative hearings.
• WAC 314-55-087 
  • Recordkeeping requirements for cannabis licensees.
• WAC 314-55-089
  • Tax and reporting requirements for cannabis licensees.
• WAC 314-55-090
  • Medical cannabis patient excise tax exemption.
• WAC 314-55-092
  • Failure to pay excise taxes and late payment of excise taxes.

Cannabis retail licensees are required to submit a retailer sales and tax report of their monthly sales, even if they have no sales, by the tax due date each month.

Licenses must report:

• Total cannabis product sold (including medical products).
• Total exempt medical products sold.
• Additional collected cannabis excise tax that cannot be returned to the buyer.

Your report and the collected cannabis excise tax payment must be received, or postmarked if mailed, no later than the tax day each month to avoid the 2% late payment penalty. If there is not a postmark or a legible postmark on the payment envelope, the date received by the LCB will be used.

There is a levied 37% cannabis excise tax collected by licensed cannabis retailers from consumers at the time of purchase. Retailers are responsible for paying uncollected excise tax if the tax rate is not correctly set-up in their systems.

Effective June 6, 2024 (ending June 30, 2029), there is a medical cannabis tax exemption. The excise tax levied in RCW 69.50.535(1) does not apply to sales of cannabis that satisfy all the following conditions.

• The sale is made by a licensed cannabis retailer holding a valid medical cannabis endorsement.
• The sale is made to a qualifying patient or their designated provider with a valid recognition card issued by the Washington State Department of Health (DOH).
• The sale is of cannabis concentrates, useable cannabis, or cannabis-infused products identified by DOH as a compliant cannabis product in chapter 246-70 WAC and tested to the standards in chapter 246-70 WAC.

Cannabis retailers may be assessed the 37% cannabis excise tax if:

• They do not have an active medical endorsement. This will be checked each month there are medically compliant sales reported to the LCB.
• The consumer did not have an active recognition card. If during an audit it is found that the consumer provided a fraudulent card, or the card was not active.
• The sale of the cannabis product did not meet the “DOH” medically compliant product as shown in their rule 246-70.

The 2% late payment penalty may be assessed if the payment is received after the tax due date for that reported month.

Below are the Cannabis Retailer forms, which have been revised to include medical cannabis product sales in June 2024. Cannabis retail licensees are required to a Retailer Sales and Tax report their monthly sales, even if they have no sales, by the tax due date each month. Your report and the collected Cannabis excise tax payment must be received, or postmarked if mailed, no later than the tax day each month to avoid the 2% late payment penalty.

How to Submit Cannabis Retailer Tax Report (LIQ1295) Guide

Please download the cannabis retailer report forms below:

• Excel version
• Fillable PDF version
   

Reporting of medical cannabis exempted sales will start with the June 2024 Cannabis Retailer monthly sales/tax report due July 22, 2024. Cannabis retailers that do not have an active medical endorsement will be notified by email, they do not qualify for the exemption and will be assessed the 37% cannabis excise tax on the claimed medical cannabis product sales. To avoid being assessed the 2% late payment penalty on the account balance, payment will be due by the tax due date.

For further assistance with cannabis tax reporting, please refer to the Cannabis Tax Reporting Guide.

If you collected more taxes than calculated from a cannabis buyer, you are required to either refund the amount to the buyer or report the over-collection using the Retailer Sales and Tax Form, cell 8, and submit the form and additional taxes to WSLCB by the tax due date of the following month.

To revise a previously submitted report - email the completed Retailer Sales and Tax Form to cannabistaxes@lcb.wa.gov.

Please note – we will only accept revised reports with credits for the last 24 months of business.

The following information is required before we will start our review of the revised reports:

• The original report and supporting point of sale report. Write on the document "Original.”
• The revised report (check the box for revised) and supporting point of sale report.
• Brief explanation for the revised report.

Once your information has been accepted, allow 10 business days for our review.

The LCB Finance Auditors may be requested to review your report and documents before our Finance Tax and Fee division will accept a revised report.

Keep your paper and electronic business records for a minimum period of six years (current year plus previous five years). You may be required to retain records for longer periods to meet the requirements of other Washington agencies or to meet federal requirements. 

Financial records include but are not limited to:

• Purchase invoices and supporting documents,
• Bank statements and cancelled checks for any accounts related to the business,
• Accounting and tax records related to the business and any true party of interest,
• Contracts / agreements for services performed,
• Employee records,
• Inventory records, records of theft, donated products,
• Detailed sales records, etc.

Retailers providing the medical cannabis excise tax exemption should keep the following records for every sale where the medical cannabis excise tax exemption is being provided:

1. Date of sale,
2. Sales price of cannabis concentrates, useable cannabis, or cannabis-infused products identified by the Department of Health as a medically compliant cannabis product in chapter WAC 246-70-040,
3. Unique identifying authorization card number of the qualifying patient making the purchase,
4. Stock keeping unit (SKU) of cannabis concentrates, useable cannabis, or cannabis infused products identified by the department as a compliant cannabis product in WAC 246-70-040 and tested to the standards in WAC 246-70-040.

Finance Tax and Fee review of your reports or data does not prevent LCB from assessing additional taxes in the future. The agency reserves the right to review your complete business accounting records through its regular audit process. You are required to keep your records on the licensed premises for a six-year period (current year plus prior completed five -years) and they be available for inspection if requested by an LCB employee.