CANNABIS TAX ISSUES
At Brotman Law, we understand that navigating the complex landscape of cannabis tax issues can be difficult for dispensary owners, so we’re here to ensure your dispensary remains compliant, while optimizing any available tax savings.
SAVE YOU MONEY
We save you money in the current tax year and create savings that will undoubtedly send a ripple through the coming years. In the long run, thousands of dollars will grow to hundreds of thousands, then millions in savings.
GREATER WEALTH
We help you keep more money in your pockets for investing, saving, or anything else that contributes to a good life. Our attorneys strive to reduce your lifetime tax liability by implementing different legal tax optimization strategies.
PEACE OF MIND
We work with you to ensure every item is correctly captured on your tax returns allowing you to enjoy greater peace of mind.
Overview
With a deep understanding of both cannabis regulations and tax laws, we safeguard dispensaries’ financial health and operational success, offering peace of mind in an evolving regulatory environment.
Whether you are facing a hefty tax bill, in the midst of an audit, looking to appeal your audit decision, or simply want to optimize your business structure, our team of seasoned attorneys can help you. Our background in IRS collections, audits, and appeals equips us to thoroughly understand and effectively apply IRS tax laws. And if you are going up against the state of California, our team has handled hundreds of sales tax audits, helping clients minimize their tax bill and reduce penalties.
Our goal is to simplify your cannabis tax issues and provide you with the information and guidance you need to make informed decisions and give you the defense you need during an examination.
The Right Thing
What Else Should I Know?
The California Department of Tax and Fee Administration (CDTFA) may conduct an audit of either your sales tax, excise tax, cultivation tax, or a combination of any thereof. Many cannabis business owners find themselves in an audit without receipts or clear and defined records of gross income, which allows the CDTFA to simply assign an estimate of gross income and force the business to pay sales and use taxes based on such an estimate. Along with sales tax, the CDTFA will add penalties, interests, and fees, making the final bill crippling for businesses.
The fact of the matter is, there’s a lot of risk when being in a CDTFA audit and having a strategic and experienced defense team is crucial to minimizing your tax liabilities. What makes us different from other firms, besides our experience, is that our team adopts a collaborative approach rather than a combative one. We recognize that cultivating a positive relationship with your examination officer is crucial to achieving optimal outcomes. We then leverage our experience defending businesses across multiple industries to devise the best strategy for your business.
The cannabis business is one of the highest taxed industries in California, and we understand that any tax savings are a big help. With a deep understanding of the unique tax challenges facing this industry, we leverage our knowledge and experience to identify opportunities for deductions, credits, and incentives specifically tailored to cannabis operations.
We take a holistic approach, aligning your personal financial goals with a comprehensive analysis of your business structure to maximize savings. Our aim is to maximize your wealth. We do this by providing you with the information you need to make strategic decisions that, in turn, will amplify your tax savings—potentially doubling or even tripling your financial benefits.
The California Department of Tax and Fee Administration (CDTFA) can pose a real challenge to many cannabis businesses. In Q4 of 2023 alone, the CDTFA reports that cannabis businesses paid over $268.3 million in taxes to the state of California. As the fourth highest earning industry in California, there is a real spotlight on the cannabis industry, putting business owners under even more scrutiny.
Our team understands the pressure cannabis business owners are under, and how important it is to have a defense team that understands both cannabis tax laws and the CDTFA. We utilize our experience with CDTDFA audits and our skill of interpreting tax laws to provide you with a tried-and-true defense. We understand how to present your case and how to work with the auditor to achieve favorable outcomes. And if you owe a liability, we will help you secure a payment plan that works with your financial situation. Our team will also mitigate penalties, interest, and fees when needed.
WE KNOW OUR STUFF
Our firm brings proven strategies to navigate the complexities of cannabis tax issues, ensuring comprehensive compliance and strategic tax optimization for businesses in the cannabis industry.
IRS & STATE COMPLIANCE
Our team has handled hundreds of audits with the IRS and CDTFA.We understand how to best prepare and what strategies work best for cannabis businesses.
PERSONAL ATTENTION
In your first consultation, we will discuss the specifics of your situation, all protected by attorney-client privilege, and curate strategies that are specific to your situation and goals.
Our Clients Will Tell You: We Get Results.
Tax Strategies, Case Studies, and Thought Leadership
Hundreds of $1,000,000s
Saved in Tax Penalties
100+
Appeal Victories
$1B+
Saved in Taxes
150+
Multimillion and billion-dollar corporate transactions
11+
Tax Services
400+
Clients represented in an audit
$160M+
in ERC Tax Credits
Our Thought Leadership Has Appeared In
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Book a Free 15-Minute Assessment Call
Set up a quick call with our firm’s concierge to see if we’ll be able to help you. The whole process will take 15 minutes or less.
STILL HAVE QUESTIONS?
Cannabis businesses facing tax disputes can explore options such as negotiation with tax authorities, appeals, and, if necessary, litigation. Working with a tax attorney experienced in cannabis tax issues can help businesses navigate these challenges effectively.
Yes, cannabis businesses operating in multiple states must navigate different state tax laws, licensing requirements, and compliance obligations. A tax advisor familiar with multistate tax issues can help ensure compliance and optimize tax strategies across jurisdictions.
Non-compliance with cannabis tax obligations can lead to severe penalties, including hefty fines, loss of licenses, and legal repercussions. It is crucial for cannabis businesses to stay updated on tax laws and regulations to avoid these risks.