Three years after the launch of California’s legal marijuana market, cannabis tax experts warn the industry should expect state regulators to ramp up tax enforcement, noting that several audits of MJ businesses are already underway.
As a result, many companies might find themselves underwater with delinquent tax bills or new audits, as experts say the industry’s state tax tab is at least in the tens of millions of dollars.
The three-year mark is a milestone: It equals the state’s statute of limitations for how far back auditors from the California Department of Tax and Fee Administration (CDTFA) can go to examine business tax returns.