Board of Equalization Rules Sales of Medical Marijuana Taxable

(WeHo News) The California Board of Equalization (BOE) announced that the Board reaffirmed that the sale of medical marijuana is not exempt from sales tax as exempt medicine.

In a case involving the Berkeley Patients Group, Inc., a medical marijuana dispensary in Berkeley, California, which claimed that their medical marijuana sales were classified as medicine and therefore exempt from sales tax, the Board of Equalization ruled that Berkeley Patients Group’s sales of medical marijuana do not meet the definition of a sale of exempt medicine, and are therefore subject to tax.

Consequently, the Berkley Patients Group is responsible for sales tax payments from 2004 up to the present for sales of medical marijuana.

The Board further affirmed that sellers of marijuana are required to hold a seller’s permit and are required to file and pay sales tax.

Persons who make sales without a seller’s permit are also generally subject to an eight year look-back period for taxes, penalties, and interest.

The BOE audited the Berkeley Patients Group, Inc. for the period July 1, 2004 through June 30, 2007 and found that Berkeley Patients Group, Inc. owes more than $6.4 million in tax and interest.

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