* * * Updated January 21, 2016 * * *
Oregon’s the new sales tax is applicable to medical dispensaries that have so-called “early” or “recreational” sales to non-medical customers under SB460 from January 4, 2016. The Oregon Department of Revenue (“ODR”) released temporary tax regulations that medical dispensaries with such sales need to be aware of as they move into the new year.
A pdf of the regulations can be dowloaded from ODR’s marijuana tax page.
General Requirements of the Sales Tax
1. The tax starts January 4 on rec. sales to dispensary customers;
2. The tax is 25% of the retail price of the seed, flower, leaf, or nonflowering plant;
3. The amount of the tax must rounded up to the next whole cent;
4. The tax should be separately itemized on customers’ receipts and must be disclosed to the customer;
5. The tax should be collected from customers;
6. The tax must be deposited with ODR using the payment voucher in the month after the sale;
Some “To-Do” Items for January 4
Register for the new tax, if applicable. ODR has provided a form for this purpose.
Dispensary POS systems should be set up to calculate sales tax on “early” sales, rounding up to the next whole cent, and to generate receipts that separately state the amount of the tax.
Internal accounting folks will need to track early sales from January 4, 2016.
Prepare to make a deposit, using the newly released ODR voucher, in February for January sales. A prior appointment is required if you will pay in cash. Interestingly, ODR felt it necessary to communicate it is not interested in cash that was removed from a body cavity, corpse, or animal.
Happy holidays and new year!
Under the current OLCC regulations, which will be applicable to recreational sales, there are a range of rules that appear intended to prevent tax motivated “bundling.” In a previous version of this blog post, I wrote that those rules would apply to early sales. Based on public comments, it appears the Oregon Department of Revenue does not consider those rules to apply. Note that care should be taken to document the retail sales price and the amount of the tax collected in each transaction to which the sales tax applies.
“Bundling” is selling items subject to a sales tax for a low price, so long as the customer also purchases a high-priced item that is not subject to a sales tax.