New Mexico recreational-use cannabis companies, for the first time, are required to file their gross receipts and cannabis excise taxes in one week. It’s unclear exactly how much the state is set to collect, but cannabis regulators reported more than $20 million in recreational-use sales for the month of April.
Since an announcement from the New Mexico Taxation and Revenue Department earlier this month, though, it seems that most if not all recreational-use cannabis companies may have under-collected taxes from customers compared to what those companies will owe. For some companies that could mean cutting costs on things like packaging and raising prices. For at least one company, it will mean a formal appeal with the state.
On May 5, the state’s Taxation and Revenue Department issued a press release with specifications on how the newly established cannabis excise tax will be calculated with state gross receipts taxes. The guidance from the department was to apply the 12 percent cannabis excise tax to total sales before figuring in the roughly 7 to 8 percent gross receipts tax. For example, on a $100 sale, cannabis companies owe the state $12 in excise taxes and an additional 7 to 8 percent, depending on the county, of $112. But the handful of cannabis producers NM Political Report spoke with said they were under the impression the two taxes were applied independently. Those two taxes applied separately under the same hypothetical $100 sale would come out to about $.84 less than the total from the department’s calculation. But cannabis producers said those small amounts add up. [Read more at NM Political Report]
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