California Cannabis Industry Payroll Tax Reporting

California businesses that hire employees to perform services are required by law to withhold, report, and pay payroll taxes to the EDD. Cannabis businesses include distributors, transporters, and dispensaries and includes employees, such as managers, plant caretakers, budtenders, security guards, salespersons, and delivery persons.

An employee includes:

• Any officer of a corporation.
• Any worker who is an employee under the ABC test.
• Any worker whose services are specifically covered by law.

An employee may perform services on a less than full-time or temporary basis. The law does not exclude services from employment which are commonly referred to as day labor, part-time help, casual labor, temporary help, probationary, or outside labor.

Generally, a business becomes subject to state payroll taxes when they pay wages over $100 in a calendar quarter to one or more employees. Once becoming a subject employer, an employer must register with the EDD within 15 days .

Read here more about reporting

Useful resources:

• FAQs – Cannabis Industry Payroll Tax Reporting
• Tip Card: Cannabis Industry Businesses (DE 643) (PDF)
• Getting Started
• Payroll Tax Seminars
• California Employer’’s Guide (DE 44) (PDF)
• Proposition 64, Adult Use of Marijuana Act (AUMA)
• California Department of Tax and Fee Administration – Tax Guide for Cannabis Businesses
• Franchise Tax Board – Cannabis Tax Law and Legislation
• Department of Consumer Affairs – Bureau of Cannabis Control
• California Department of Public Health – Medical Marijuana Identification Card Program