The state taxes that California cannabis businesses pay won’t be included in the total used to calculate local taxes for consumers under a bill Gov. Gavin Newsom signed Sept. 28.
The Democratic governor signed the new law (S.B. 1059) from Sen. Steven Bradford (D), preventing the compounding of taxes, which happens when one imposed tax is included the base of a subsequent tax. It takes effect Jan. 1, 2025, and would result in an unknown but potentially significant revenue loss to municipalities.
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