Important Tip Medical marijuana is subject to sales tax regardless of its form.Colorado medical marijuana dispensaries face a plethora of unsettled legal issues. However, legal questions regarding sales tax were clarified yesterday by an opinion from the Colorado attorney general, which takes the position that medical marijuana is subject to Colorado state sales tax. The opinion also states that the form in which medical marijuana is sold does not alter the fact that it is subject to sales tax requirements: “By definition, any food product containing medical marijuana…would not be exempt from sales tax….” Thus, it appears, for example, that baked goods containing medical marijuana are subject to state sales tax. On the other hand, the opinion also states that the sale of marijuana seeds is exempt from state sales tax because seeds constitute an agriculturally-related product.
In short, to comply with sales tax laws, medical marijuana dispensaries must obtain a sales tax license and collect and remit sales tax to the state. To obtain a sales tax license, dispensaries must complete and submit Colorado form CR 100, which can be obtained from the Colorado Department of Revenue’s website.
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