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These changes took effect on May 3, 2023.
If you're an adult-use cannabis products distributor, you must pay tax on your sales of adult-use cannabis products to adult-use cannabis products retailers. If you’re an adult-use cannabis products retailer, you must pay a retail tax on the adult-use cannabis products you sell or transfer to retail customers.
Before you begin distributing or selling adult-use cannabis products, you must register with the Tax Department and receive your Adult-Use Cannabis Certificate of Registration. If you're not a licensed distributor or retailer, you must first apply for an adult-use cannabis license with the New York State Office of Cannabis Management.
An adult-use cannabis products distributor cannot sell adult-use cannabis products to adult-use cannabis products retailers who have not received their Adult-Use Cannabis Certificates of Registration or who have had their certificates suspended or revoked.
You must apply for—and receive—an adult-use cannabis license with the Office of Cannabis Management that allows you to distribute adult-use cannabis products or sell adult-use cannabis products at retail to persons 21 years of age and older, before you register with the Tax Department and begin doing business.
To register, apply online for an Adult-Use Cannabis Certificate of Registration. The application fee is $600. If you have fixed and final New York State liabilities, you must resolve them before we can approve your application. You may contact the Tax Department to determine if you have any outstanding liabilities, or view them in your Online Services account. To pay any outstanding liabilities, see: Pay a bill or notice.
Once your application is approved, the Tax Department will email you instructions on how to print your Form MT-222.7, Adult-Use Cannabis Certificate of Registration.
An Adult-Use Cannabis Certificate of Registration is valid until the date printed on it, unless it has been suspended or revoked earlier. You must renew your registration prior to the printed expiration date. The renewal fee is $600.
If you sell any tangible personal property anywhere in New York State, you must register with the Tax Department and obtain a Certificate of Authority, collect tax, and report these sales as instructed on your sales tax returns. Examples of tangible personal property subject to sales tax when sold to customers include, but are not limited to:
For more information, see Tax Bulletin Do I Need to Register for Sales Tax? (TB-ST-175) and Tax Bulletin How to Register for New York State Sales Tax (TB-ST-360).
Note: Adult-use cannabis products are exempt from sales tax, but are subject to the adult-use cannabis products tax imposed on a distributor or retail seller who sells adult-use cannabis.
The tax is imposed at the following rates:
If you make retail sales of adult-use cannabis products, a retail tax of 13% on the amount charged for the sale or transfer is imposed.
If you are an adult-use cannabis products distributor or an adult-use cannabis products retailer, you must:
You must file online using the Tax Department’s Adult-Use Cannabis Products Tax Web File application. To file:
For important payment information, see Registration and tax payments.
|Quarterly period||Filing due date|
|March 1–May 31||June 20|
|June 1–August 31||September 20|
|September 1–November 30||December 20|
|December 1–February 28 (29 if leap year)||March 20|
If the due date falls on a Saturday, Sunday, or legal holiday, the return is due on the next business day.
If you have debit blocks on your bank account, you must communicate with your bank to specifically authorize adult-use cannabis registration and adult-use cannabis products tax payments, even if you have already authorized payments for other taxes to the Tax Department. Your bank will process only these authorized transactions.
Note: The Tax Department’s ACH company ID and name for adult-use cannabis registration and adult-use cannabis products tax are different. You must provide your bank with both to avoid payment processing issues.
To find ACH company IDs and names, see ACH debit block information.
The taxes imposed on adult-use cannabis products do not apply to sales to a person holding a cannabis research license under the Cannabis Law.
A cannabis research license permits a licensee to produce, process, purchase, and/or possess cannabis for the following limited research purposes:
You must maintain complete and accurate records containing all the information you need to properly prepare your adult-use cannabis products tax returns and to verify their accuracy if you are audited by the Tax Department. This includes, but is not limited to:
You must retain all records for three years after the due date of the return they relate to or the date you file the return, whichever is later.
Adult-use cannabis products distributors and adult-use cannabis products retailers are subject to the penalties below, in addition to any other civil or criminal penalties that may apply.
If you’re required to obtain a certificate of registration but do not, and you possess adult-use cannabis products, you will be subject to a penalty up to:
If you're an adult-use cannabis products distributor or an adult-use cannabis products retailer who fails to maintain or make required records available to the Tax Department, you are subject to a penalty up to $500 for each month or part of a month in which the failure occurs.
If you’re an adult-use cannabis products distributor or an adult-use cannabis products retailer who is required to obtain a certificate of registration, and who is determined to have possessed or sold illicit cannabis, your certificate of registration will be revoked for up to:
Your sales tax Certificate of Authority may be revoked if you:
If you knowingly possess or have control over any type of illicit cannabis, you are liable for a civil penalty up to the following after notice and an opportunity for a hearing:
If you knowingly possess for sale illicit cannabis, illicit concentrated cannabis, or illicit cannabis edible product, you may be liable for a civil penalty as follows after notice and an opportunity for a hearing:
|If you possess for sale||you are subject to the following penalties:|
|more than 5 pounds but less than 12 pounds of illicit cannabis||
more than 1 pound but less than 4 pounds of illicit concentrated cannabis or illicit cannabis edible product
|12 or more pounds of illicit cannabis||
|4 or more pounds of illicit concentrated cannabis or illicit cannabis edible product||
If you knowingly possess more than 5 pounds of illicit cannabis or more than 1 pound of illicit concentrated cannabis or illicit cannabis edible product, for sale in a commercial location, you may be liable for additional civil penalties up to the following after notice and an opportunity for a hearing:
If you’re an adult-use cannabis products distributor who knowingly sells any adult-use cannabis product to any person who is not registered as an adult-use cannabis products retailer but is selling such products at retail, or whose registration has been suspended or revoked, you may be liable for a civil penalty up to the following after notice and an opportunity for a hearing:
You may be subject to criminal penalties and a jail sentence if you:
The Tax Department or its duly authorized representatives are authorized to perform the following where adult-use cannabis products are distributed, placed, stored, sold or offered for sale:
If you’re registered as an adult-use cannabis products distributor or adult-use cannabis products retailer and you or your agents refuse to give the Tax Department or its duly authorized representatives the means, facilities, and opportunity for the inspections and examinations required, after notice and an opportunity for a hearing, your Certificate of Registration may be revoked for:
Adult-use cannabis products means cannabis, concentrated cannabis, and cannabis-infused products, as reflected on the product label, whether or not for use by a cannabis consumer. It does not include medical cannabis or cannabinoid hemp product.
Cannabis edible product means a product containing either cannabis or concentrated cannabis and other ingredients, intended for use or consumption through ingestion, including sublingual or oral absorption.
Cannabis flower means the flower of a plant of the genus Cannabis that has been harvested, dried and cured but has not undergone any processing whereby the plant material is transformed into a concentrate, including but not limited to, concentrated cannabis, or into an edible or topical product containing cannabis or concentrated cannabis and other ingredients. Cannabis flower excludes leaves and stem.
Concentrated cannabis means the separated resin, whether crude or purified, obtained from cannabis; or a material, preparation, mixture, compound or other substance which contains more than 3% by weight or by volume of total THC.
Commercial location means real property or a vehicle held out as open to the public or otherwise used to conduct wholesale or retail transactions, including a storage area in or adjacent to such property or vehicle. It does not include a residence or a personally owned vehicle located at such residence.
Illicit cannabis means and includes any adult-use cannabis product, including concentrated cannabis, and cannabis edible products on which any tax required to have been paid has not been paid. Illicit cannabis does not include any cannabis lawfully possessed.
Person means every individual, partnership, limited liability company (LLC), society, association, joint stock company, corporation, estate, receiver, trustee, assignee, referee, and any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of the foregoing.
Place of business does not include a residence or other real property, or any personal vehicle on or about such property, not held out as open to the public or otherwise being utilized in a business or commercial manner, unless probable cause exists to believe that such residence, real property or vehicle is being used in a business or commercial manner for the buying or selling of adult-use cannabis products.
Possession for sale means possession of more than five pounds of adult-use cannabis products, or one pound of concentrated cannabis products or cannabis edible products, at a business or other location used for the storage, distribution or sale of such cannabis products, with the intent to sell the products at retail.
Sale means any transfer of title, possession, or both, exchange or barter, rental, lease or license to use or consume, conditional or otherwise, in any manner or by any means whatsoever for a consideration or any agreement therefor.
THC means Delta-9-tetrahydrocannabinol; Delta-8-tetrahydrocannabinol; Delta-10-tetrahydrocannabinol; and the optical isomer of such substances.
No. You must have a valid license from the Office of Cannabis Management before you can apply.
You must register as an adult-use cannabis products distributor if you sell or transfer adult-use cannabis products to an adult-use cannabis products retailer.
You must register as an adult-use cannabis products retailer if you sell adult-use cannabis products to a retail customer.
An individual who participates in lawful personal use or personal cultivation of cannabis is not required to register.
You must register for the adult-use cannabis products tax and file returns with the Tax Department if you are:
If you plan to sell taxable tangible personal property or provide taxable services, you must apply for your sales tax Certificate of Authority at least 20 days before beginning business.
No. Adult-use cannabis products are exempt from sales tax but are subject to the adult-use cannabis products tax imposed on a distributor or retail seller who sells adult-use cannabis.
No. Tax professionals cannot apply for an Adult-Use Cannabis Certificate of Registration on behalf of their clients.
No. You must wait until the Tax Department emails Form MT-222.7, Adult-Use Cannabis Certificate of Registration, to you for printing before you can distribute or sell adult-use cannabis products.
Enter the taxable sales of adult-use cannabis products on the jurisdiction line for the county where your registered retail dispensary is located.
The penalties for illicit cannabis do not apply to an individual lawfully in possession of adult-use cannabis or concentrated cannabis for personal use.
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