This bill is part of the 2019 Cannabis Bills section of our ongoing update on California Cannabis Legislation – see the full California Cannabis Law Legislative Update which includes information on cannabis bills from other years.
AB 953 (Ting D) Cannabis: state and local taxes: payment by digital asset.
Existing law authorizes the legislative body of a city and the board of supervisors of a county to license, for revenue and regulation, and fix a license tax upon, every kind of lawful business transacted in the city or county, as specified.
This bill, on and after January 1, 2020, would allow the legislative body of a city or the board of supervisors of a county to determine and implement a method by which a licensee under MAUCRSA may remit any city or county cannabis license tax amounts due by payment using stablecoins, as defined. The bill would authorize that city or county in determining that method to either accept stablecoins directly into a digital wallet controlled by that jurisdiction or to utilize a third-party digital asset payment processor that allows for the immediate conversion of any payments made by stablecoins into United States dollars and deposit into an account of that jurisdiction.
Existing law imposes a state excise tax on the purchase of cannabis and cannabis products, as defined, at the rate of 15% of the average market price of any retail sale by a cannabis retailer. Existing law also imposes a state cultivation tax upon all cultivators on all harvested cannabis that enters the commercial market, at specified rates per dry-weight ounce of cannabis flowers and leaves. The California Department of Tax and Fee Administration administers the cannabis excise tax and the cannabis cultivation tax.
This bill, on or before June 1, 2020, would require the department to determine and implement a method by which a licensee under MAUCRSA may remit any cannabis excise tax or cannabis cultivation tax amounts due by payment using stablecoins, as defined. The bill would authorize the department in determining this method to either accept stablecoins directly into a state-controlled digital wallet or to utilize a third-party digital asset payment processor that allows for the immediate conversion of any payments made by stablecoins into United States dollars and deposit into a state account. The bill would allow the department to consult with the State Treasurer’s office as needed to implement that payment method.
[Note: Stablecoins are cryptocurrencies with their values pegged to other assets such as the US dollar or gold. As a result, stablecoins enjoy the benefits of being a cryptocurrency (transparency, security, privacy, etc.) without the extreme volatility that comes with most other types of digital coins.]
Read more about California Cannabis Legislation – see the full California Cannabis Law Legislative Update.
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