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July 15, 2022 | Posted in:

Cannabis Taxes in New Jersey

As of April 2022, cannabis sales have become legal for recreational and medical use for anyone 21 years and older in New Jersey. Most proponents of legalization tout the benefits of a strong revenue stream from the state and local taxes on legal weed and marijuana products. So what is the tax on cannabis in NJ?

If you are someone who is selling or purchasing cannabis, know these three cannabis taxes in New Jersey that may affect the transaction.

Three NJ Taxes for Cannabis

Social Equity Excise Fee (SEEF)

Cannabis cultivators must charge a Social Equity Excise Fee for the sale or transfer of recreational cannabis. The Social Equity Excise Fee is based on the state’s average retail price of consumable cannabis. For 2022, the fee is $1.10 per ounce. However, the state can change that fee every year.

Sales and Use Tax Retail Sales

Like most other things in the state of New Jersey, sales of cannabis are subject to sales tax. The current sales tax rate is 6.625%. If you are buying recreational cannabis, expect to pay sales tax. However, if you are buying cannabis for medical purposes, there is no longer a sales tax. Medical cannabis is tax-free as of July 1, 2022.

Local Cannabis Transfer Tax

Municipalities in New Jersey can charge a transfer tax of up to 2% on the sale of recreational cannabis or similar products. Municipalities can also charge a user tax on top of the transfer tax. These taxes can vary from town to town so your best bet is to check with your local municipality.

Consult with a Cannabis Tax Expert

Running a cannabis business in the state of New Jersey can be uniquely challenging. It is important to have a trusted and knowledgable CPA by your side to guide you. Don’t hesitate to contact an Alloy Silverstein advisor today.

Author:

Associate Partner
 
Ren III provides tax, accounting, and advisory services to a broad range of clients, with a specialty for manufacturers, title insurance companies, and professional service providers.
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JB Financial Associates is now Alloy Silverstein.
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