State Says "Underground Sellers" of Pot Can Pay Taxes in Cash (Really)

State Says "Underground Sellers" of Pot Can Pay Taxes in Cash (Really)
Timothy Norris/L.A. Weekly

After state tax officials vowed to crack down on medical marijuana dispensaries that fail to keep up with their taxes, the California State Board of Equalization (BOE) announced this week that pot sellers can pay up in cold, hard cash.

In fact, the BOE's exact words were that it vows to "work with cannabis operators, whether they are legitimate medical cannabis distributors or underground sellers who wish to come out of the shadows, to establish a recurring schedule for cash payment."

Far out, man. Does this include that guy who sells out of a trench coat? Not sure.

Fortunately, if you're running a pot shop that isn't legit, and it turns out that a vast majority of retail weed sellers in the city of Los Angeles are fully illegal, no matter what they say about being "pre-ICO," you don't have to bring a suitcase to your nearest BOE field office.

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The board says it takes checks. Phew.

What's the reason for this irie attitude?

The state wants pot shops, legal or not, to step forward with millions of dollars in state taxes they've failed to pay. The BOE estimates that 258 collectives in L.A. alone, where only 125 are supposed to be legitimately operating, are not registered to pay California tax.

Because banking for marijuana sellers is still a gray area under federal law, most dispensaries deal in cash. The state wants to make it easier to get its cut.

The BOE states:

Cash businesses have no excuse for not maintaining books and records, and reporting their taxes just as non–cash-based business owners do.

... The BOE will help medical cannabis business operators pay their tax liability by eliminating the need to bring in large amounts of cash, assisting them in registering their business under their DBA (Doing Business As), and accepting personal checks as payment for their tax liability. Medical cannabis sellers, and other permit holders, can contact their nearest field office to make arrangements.

They make it sound so easy.

Of course, if you're one of those "underground sellers" who owes, be prepared for a coming crackdown and possible "imprisonment," the BOE says.

Send feedback and tips to the author. Follow Dennis Romero on Twitter at @dennisjromero. Follow L.A. Weekly News on Twitter at @laweeklynews.

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