In the uphill battle to regulate the colossal cannabis market covering the greater Los Angeles, California area, authorities served tax warrants to 12 unlicensed dispensaries. After various regulatory bodies cracked down on illegal dispensaries in the area using numerous other methods, tax liens will be dished out to illegal operators who will face tax evasion.
The California Department of Tax and Fee Administration (CDTFA) issued a news release on July 8, announcing that the organization led a joint effort with California Highway Patrol (CHP) to identify illegal operations spanning Los Angeles and San Bernardino Counties.
“The CDTFA’s collaboration with the CHP is an important deterrent to tax evasion,” said CDTFA Director Nick Maduros. “Tax evasion unfairly shifts the burden onto all other taxpayers and makes it tough for those businesses that are playing by the rules to survive.”
The 12 illegal operations were not identified within the news release.
The CDTFA warned other illegal operators in the area—which are many—what can befall them in the event that they don’t cease operation: “… Any person who willfully evades or attempts to evade the reporting, assessment or payment of the cultivation tax, the cannabis excise tax, or the sales tax that would otherwise be due,” the CDTFA warned, “is guilty of cannabis and sales tax evasion.”
The crackdown was spearheaded by the CDTFA Investigations Bureau, a branch of the CDTFA that “plans, organizes, directs, and controls all criminal investigative activities for the various tax programs.”
Under Proposition 64, and the CDTFA, cannabis operators in the state are confronted with some of the highest cannabis tax rates in the nation.
Legal operators must pay several layers of tax: a 15 percent excise tax on recreational sales, 7.25 percent in sales tax, and any local taxes going up to one percent. Cities can also