Cannabis retailers

Cannabis retailers are licensed by the Washington State Liquor and Cannabis Board (LCB) to sell useable cannabis, cannabis concentrates, and cannabis-infused products to consumers in Washington.

Cannabis retailers are subject to Washington taxes administered by the Department of Revenue.

Business and occupation (B&O) tax

Gross income from the sale of useable cannabis, cannabis concentrates, and cannabis-infused products to consumers is subject to the B&O tax under the Retailing classification.

Retail sales tax

Cannabis retailers must also collect and remit retail sales tax on all sales of useable cannabis, cannabis concentrates, and cannabis-infused products to consumers. The retail sales tax rate is based on the retailer’s business location where the customer takes delivery of the product.

• Cannabis products are not prescription drugs: Sales of cannabis do not qualify for the sales and use tax exemption for prescription drugs whether sold for recreational or medicinal purposes.
• Cannabis products are not food or food ingredients: Cannabis-infused products do not qualify for the exempt food sales deduction.
• Nonresidents must pay retail sales tax on purchases of cannabis products: Sales of cannabis to nonresidents do not qualify for the limited nonresident sales tax exemption.

Cannabis excise tax

Retailers must collect a 37% cannabis excise tax on each retail sale of useable cannabis, cannabis concentrates, and cannabis-infused products.

The 37% cannabis excise tax is not included in the total selling price for purposes of the B&O tax and retail sales tax.

The LCB is the only agency authorized to accept payments for the cannabis excise tax.

For more information, see LCB’s webpage on the cannabis excise tax. If you have questions regarding this tax, contact LCB’s Customer Service Team at marijuanataxes@lcb.wa.gov or 360-664-1789.