nov 2, 2020 - California Tax Return

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On November 2nd, 2020 cannabis third quarter tax returns were due in the state of California. The total tax collected from cannabis in the third quarter of 2020 was three hundred and six million USD. In the previous quarter of 2020, the total tax revenue was two hundred and sixty million USD which contained one hundred and thirty five million in excise tax, thirty million in cultivation tax, and ninety four million in sales tax. Since 2018, two years after Proposition 64 was passed, California generated just over one billion dollars in tax revenue from cannabis. Since the beginning of 2018, two new tax laws were passed on cannabis. One of the laws passed was a cultivation tax on harvested cannabis that enters the commercial market, and the other law being a 15% excise tax on all purchases of cannabis or cannabis products. The California Department of Tax and Free Administration (CDTFA) uses taxes collected from tobacco, fuel, alcohol and cannabis to fund state programs. This includes schools, transportation, public safety and health, social services, and natural resource management programs.

According to Proposition 64, “Revenue paid into the new California Marijuana Tax Fund will allocate 60% of outflows to youth programs, 20% to environmental damage cleanup, and 20% to public safety.” All tax funding generated from cannabis will be distributed around the state for a variety of reasons. Firstly, most of this revenue will be put into youth programs such as education. Furthermore, this taxation will not only boost state funding, it will boost productivity in the economy. The economic impact cannabis has had is on the incline. It is projected that in 2021, the cannabis industry will increase the US economy by ninety two billion dollars. This will allow for eighty thousand new jobs in 2021, stemming from agriculture to retail. All these benefits will contribute five hundred USD of economic impact per capita in California. Meanwhile in Nevada, it will impact each person economically by one thousand nine hundred and seventeen USD. By allowing Proposition 64 to be passed in 2016, it has significantly improved the United States economy through state funded programs and business entities.

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