Cannabis processors are licensed by the Washington State Liquor and Cannabis Board (LCB) to process cannabis into useable cannabis, cannabis concentrates, and cannabis-infused products and sell these products at wholesale to cannabis retailers and other cannabis processors.
Cannabis processors are subject to Washington taxes administered by the Department of Revenue.
Cannabis processors must report the total value of cannabis products they process (manufacture) in Washington under the manufacturing B&O tax classification.
Cannabis processors must also report all sales of cannabis products to retailers and other processors under the wholesaling B&O tax classification. Processors must keep a copy of a valid reseller permit for each retailer or processor for 5 years after the date of sale.
Multiple Activities Tax Credit (MATC)
An MATC may be claimed so that B&O tax is only paid once for the same product. The processor must complete the Multiple Activities Tax Credit (Schedule C) each time the credit is claimed.
Cannabis processors must pay retail sales tax or use tax on all machinery, equipment, and supplies used to process cannabis into useable cannabis, cannabis-infused products, and cannabis concentrates because they are considered the consumer of these items.
Cannabis processors do not qualify for the manufacturer’s machinery and equipment sales and use tax (M&E) exemption.
Retailers must collect a 37% cannabis excise tax on each retail sale of useable cannabis, cannabis concentrates, and cannabis-infused products. The LCB is the only agency authorized to accept payments for the cannabis excise tax.
If you have questions regarding this tax, contact LCB’s Customer Service Team at email@example.com or 360-664-1789.