How are taxes on cannabis products determined?
In Pennsylvania, taxes on cannabis products are determined in several ways. First, legislation passed in 2017 imposes a flat 6% sales tax on all cannabis products, from flower to concentrates. This tax is added to any local or county taxes imposed on cannabis products, which can range from 1-2% in some areas. Additionally, the Pennsylvania Department of Revenue has set the grower/processor tax, which is a 6% tax imposed on cannabis purchased by a dispensary from a grower/processor. Finally, cannabis products may be subject to special local taxes, including the Local Option Tax, which is a 2% tax imposed by municipalities on cannabis products purchased from a dispensary within their jurisdiction. The exact amount of this tax varies depending on the municipality, so it’s important to check with your local government before making any cannabis purchases. All taxes collected on cannabis products go towards funding the Pennsylvania Department of Drug and Alcohol Programs and the Pennsylvania State Police.
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