Taxes due on marijuana

Applicable taxes

Business and occupation (B&O) tax applies to your business’s gross receipts. You must also collect and submit sales tax on your retail transactions. Retail sales tax must be paid to the Department of Revenue. The fact sheets in the "More Information" section explain your responsibilities.

Purchases for resale

Marijuana processors, producers, and retailers may use a reseller permit when making purchases for resale. Examples include, but are not limited to:

  • Marijuana products and accessories.
  • Packaging materials and containers.
  • Ingredients that physically become part of the article for sale.

Reseller permits may not be used for purchases of products or equipment used to grow cannabis/marijuana.

Collective gardens eliminated

  • Collective gardens may not operate in Washington.
  • All businesses that sell any type of marijuana in Washington (including marijuana concentrates, useable marijuana, and marijuana infused products) must be licensed with the Liquor and Cannabis Board (LCB).
  • Any business that sells marijuana must file and pay taxes to the department, regardless of their license status with LCB.

Tax exemptions for medical marijuana

A B&O tax exemption is available for cooperatives that grow (produce), process, and provide marijuana products and low-THC products to their members.

Sales and use tax exemptions are available for:

  • Any of the following transactions by marijuana retailers with a medical marijuana endorsement:
    • Sales and donations of compliant marijuana products as identified by the Department of Health (DOH) to customers with recognition cards. *
    • Sales and donations of low-THC products (0.3% or less) to customers with recognition cards. 
    • Sales of high-CBD compliant marijuana products to all consumers. 
    • Sales and donations of topical, nondigestible low-THC products (0.3% or less) by certain healthcare professionals to qualifying patients.
    • Marijuana and low-THC products produced by a cooperative for its members. 

*For purposes of this exemption, the DOH has determined that a “compliant marijuana product” is any marijuana product purchased by a qualifying patient with a recognition card. See DOH policy statement MMJ 21-01.

Medical marijuana endorsements for retailers

To get a medical marijuana endorsement you will need to apply with the Liquor and Cannabis Board (LCB). You must already have a retail marijuana endorsement to apply for the medical marijuana endorsement.

How to file and pay your taxes

Log on to Revenue’s My DOR to file your monthly returns. You must file each month. If you have no business activity to report, you must file a "no business" return.

You must also pay your taxes through My DOR. Businesses are required to electronically pay excise tax returns unless a waiver has been granted (RCW 82.32.080). Failure to pay the excise tax returns electronically may result in a penalty.

Excise taxes (37%) paid to Liquor and Cannabis Board

Revenue is not accepting tax payments for the LCB. Marijuana excise taxes due must be paid to LCB.

To stay up to date on the development of marijuana licenses including producer, processor, retailer, transportation, research and cooperative registrations, join the LCB listserv.