Yesterday, IndicaOnline released the latest software update for Indica POS to help California marijuana dispensaries simplify the various cannabis taxes. The new update will allow cannabis retailers to apply different taxes based on the patient type. There are several factors that will affect the amount of taxes applied during a transaction.
Now that several states have legalized recreational marijuana, we’ve made some adjustment to accommodate a range of customers that could potentially make purchases from cannabis retailers. Currently there are three patient types that dispensary staff should be aware of:
Medical Patient 18+ with State Medical ID - These are medical marijuana patients who have applied for and been approved for a state medical card through the department of public health.
Medical Patient with Doctor Recommendation - These are medical marijuana patients 18+ who have been recommended cannabis by a qualified physician for treating specific medical conditions.
Adult Use 21+ - These are recreational patients who are older than 21 years old and are purchasing cannabis for recreational purposes.
Each of these patient categories is subject to different cannabis taxes so classifying your customers is essential to charging them the appropriate taxes during check-out. Once a customer has been grouped into the relevant patient type, dispensary management will need to assign the coordinating tax percentage to the patient type.
Assigning the appropriate tax percentages to the patient types is critical to processing transactions accurately. Depending on the location of a marijuana storefront, different cannabis taxes will be applied on the local level. To find out the sales tax for your dispensary location please consult the California Department of Tax and Fee Administration.
IndicaOnline’s new update provides cannabis retailers the option of entering three different tax percentages: Sales Tax, MJ Sales Tax, and Local MJ Sales Tax. Review the descriptions below to ensure you’re correctly inputting your tax settings.
Sales Tax - The sales tax is the State sales tax percentage that is applied to purchases that do not contain cannabis. EX: Bongs, pipes, rolling papers, etc.
MJ Sales Tax - The MJ sales tax is the tax percentages from the State, County, and City that must be applied to all cannabis goods sold. The only exception is Medical Patients with State Card will not be subject to this tax.
Local MJ Tax - The local MJ tax is if you add a separate amount to your customers' transaction to cover your cannabis business tax.
After these tax tiers have been assigned to respective patient type, the cannabis taxes will be applied automatically and be reflected on the patient’s receipt. Learn more about setting up tax tiers and patient types by reviewing our full tax tutorial. If you have any additional questions regarding how IndicaOnline POS calculates taxes, please call (888) 420-4207.