Attention New Jersey Cannabis Operators: Your First SEEF Return is Due on May 20
With the launch of adult-use cannabis sales in New Jersey, the first tax payments do not lag far behind. Class 1 cannabis cultivators are required to make their first Social Equity Excise Fee (SEEF) payment this Friday, May 20, 2022.
The SEEF tax rate is $1.10 per ounce of adult-use cannabis sold. New Jersey cultivators must also file the SF-100 monthly tax return to report the amount of usable ounces sold for the adult-use market (even if no sales or transfers of cannabis occur).
This first SEEF payment will cover less than two weeks of the sales made from the start date on March 18, 2022. Moving forward, the SEEF payment is always due by 11:59 p.m. on the 20th day of the month after the end of the previous filing period. If the due date falls on a weekend or legal holiday, the return and payment are due the following business day.
Letters with instructions for making the tax filings were sent out to the licensees in early May.
Some technicalities to keep in mind as you prepare to file:
- Medical cannabis is NOT subject to SEEF.
- SEEF is solely imposed on the Cultivator and is not due again on sales from manufacturers, processors, or retailer sales.
- It will not be paid again at another license level, regardless of whether the cannabis is later for sale as-is or if it has been converted to edible form.
- All cannabis types and categories are subject to the same SEEF rate when sold by a cultivator, no matter the strain, potency, trim or shake — anything that falls under the definition of “usable” cannabis.
In addition to the SEEF, NJ Cannabis operators will also need to contend with sales taxes and locally imposed gross receipts taxes:
- Retail sales of recreational cannabis are subject to the state’s ordinary sales tax under N.J.S.A. 54:32B-3(a). Sales of medical cannabis are not subject to sales tax, but are subject to a special 2% tax until the end of June.
- Depending on the locality, cannabis operators may be subject to the following gross receipts tax rates:
- Cultivation, Manufacturer, Retail – 2%
- Wholesale (Distribution) - 1%
- Returns are generally due quarterly in April, July, October, and January.
If you have any questions about calculating or paying NJ cannabis taxes, or any other state’s cannabis tax, please reach out to our leading cannabis tax practice.