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To: Cannabis Licensees
Fr: Justin Nordhorn, Director of Policy and External Relations
Re: Implementation of SHB 1453, Temporary Excise Tax Exemption
Last week, the Liquor and Cannabis Board (LCB) sent a message that the 2024 legislative fact sheets are now available on our website. In that message, we noted that we would follow up with additional information regarding Substitute House Bill 1453 which pertains to a temporary excise tax exemption under certain circumstances.
SHB 1453 creates a temporary excise tax exemption on cannabis sales that meet three conditions.
- First, the buyer must be a registered patient in the Department of Health’s (DOH) Medical Cannabis Authorization database.
- Second, they must buy the cannabis from a retailer holding a current medical endorsement.
- Third, only DOH-compliant medical cannabis under WAC 246-70-040 qualifies for the excise tax exemption. No other cannabis products qualify for the excise tax exemption, which expires on June 30, 2029.
To further clarify, we are providing this infographic and some brief FAQs. Within the FAQs are links to DOH's medical cannabis program as well as the location on LCB’s site for applying for a medical endorsement.
Effective June 6, 2024
The effective date for the exemption is June 06, 2024. Retailers must keep accurate records demonstrating the 37% excise tax exemption was provided by a medically endorsed store, to a qualifying patient, or their designated provider, in the DOH registry, and for medically compliant product under WAC 246-70-040. Retailers are responsible and liable for proper tax collection and remittance. Retailers providing inappropriate tax exemptions will need to pay the taxes on any sale not in compliance with the law.
Proper Documentation
The LCB audit team cannot provide an exact list of required processes and documents outside of WAC rules that are needed because each business is run differently and the documents to be reviewed can changed based off the business. Our audit and tax teams are working on building the rules and requirements for verifying qualifying sales. Until then, Licensees should review their processes for compliance with the law and maintain records that justify the sales and qualifying exemptions.
Thank you for your review. For additional questions, please contact your cannabis consultant or enforcement officer.
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