4 Del. Admin. Code § 5001-13.0

Current through Reigster Vol. 28, No. 6, December 1, 2024

Section 5001-13.0 - Retail Marijuana Tax

13.1 Collection and rate

13.1.1 The Retail Marijuana Tax imposed on the consumer under 4 Del.C. § 1382 must be collected at the point of sale, held in trust, and remitted to Revenue by each licensee of a retail marijuana store that engages in the retail sale of marijuana products.

13.1.2 The Retail Marijuana Tax is considered a tax upon the retail marijuana store licensee that is required to collect the tax, and the retail marijuana store licensee is considered the taxpayer.

13.1.3 The Retail Marijuana Tax rate is the rate set forth in 4 Del.C. § 1382(b).

13.1.4 The Retail Marijuana Tax collected each month consists of the total amount of retail sales of marijuana products for that month multiplied by the Retail Marijuana Tax rate as calculated on the Retail Marijuana Tax Form. If the tax imposed under this section does not equal an amount calculable to a whole cent, the tax is equal to the next higher whole cent.

13.1.5 The Retail Marijuana Tax imposed on the retail sale of marijuana products under 4 Del.C. § 1382 shall not be imposed on an individual with a medical marijuana program card.

13.2 Submission of Retail Marijuana Tax Form

13.2.1 Each month every retail marijuana store licensee must file with Revenue a Retail Marijuana Tax Form, which is due on or before the 15th day of the following month.

13.2.2 When the due date falls on a Saturday, Sunday, or a state legal holiday, the Retail Marijuana Tax Form is due on the next business day following the Saturday, Sunday, or state legal holiday.

13.2.3 Each retail marijuana store must file a Retail Marijuana Tax Form every month, even if it:

13.2.3.1 Is not required to remit payment of any Retail Marijuana Tax for that month; or

13.2.3.2 Does not make any sales of marijuana products for that month.

13.2.4 Retail marijuana tax forms must be electronically filed with Revenue on the Delaware Taxpayer Portal.

13.3 Payment

13.3.1 Each retail marijuana store licensee must pay the Retail Marijuana Tax due on or before the 15th day of each month with respect to the sales of marijuana products for the immediately preceding month.

13.3.2 When the due date falls on a Saturday, Sunday, or a state legal holiday, the payment is due on the next business day following the Saturday, Sunday, or state legal holiday.

13.4 Delaware Taxpayer Portal

13.4.1 Retail marijuana tax due to the State of Delaware reported on the Retail Marijuana Tax Form must be verified, computed, and paid electronically on the Delaware Taxpayer Portal. The Delaware Taxpayer Portal is be located at https://tax.delaware.gov.

13.4.2 Taxpayers who do not already have a Delaware Taxpayer Portal account should create a Delaware Taxpayer Portal account at least 96 hours before the Retail Marijuana Tax Form is due.

13.5 Liability for unpaid Marijuana Tax

13.5.1 Except to the extent inconsistent with this regulation or Chapter 13 of Title 4 of the Delaware Code, any retail marijuana store which fails to file a Retail Marijuana Tax Form or pay the Retail Marijuana Tax when due is subject to penalties as any other taxpayer. The provisions of Chapter 5 of Title 30 of the Delaware Code shall govern the assessment, collection, review, and appeal of deficiencies of tax imposed by Title 4 of the Delaware Code, and any interest and penalties thereon.

13.5.2 The Commissioner or Division may impose additional penalties or take other enforcement actions, including suspension or cancellation of the retail marijuana store's license.

13.5.3 If a retail marijuana store fails to timely pay any Retail Marijuana Tax due, there shall be added to the tax an amount equal to 1% of the tax required to be shown on the return for each month, or fraction thereof, during which the failure continues, not exceeding 25% in the aggregate.

13.5.4 In addition to the retail marijuana store, each responsible person who willfully fails to collect or truthfully account for and pay over the tax, or willfully attempts in any manner to evade or defeat any tax or the payment thereof, shall, in addition to other penalties provided by law, be liable for the total amount of the tax evaded, or not collected, or not accounted for and paid over, including interest and penalties.

13.6 A retail marijuana store must provide customers a printed or electronic receipt at the time any retail sale of marijuana products occurs that includes:

13.6.1 The retail marijuana store's business name and address;

13.6.2 An identification of items or products on which tax was charged.

13.6.3 The total amount of retail marijuana tax, which must be separately stated;

13.6.4 The total cost to the customer at the point-of-sale;

13.6.5 The category of taxed product or the product category used in the seed-to-sale tracking system for each item or product sold, either as a heading for a group of items or products or as information associated with the item or product name;

13.6.6 Information sufficient to identify the original transaction, which could be either:

13.6.6.1 The date and time of the transaction, the register from which the transaction was conducted, or the name or employee identification number of the employee who tendered the sale; or

13.6.6.2 A unique alphanumeric identifier.

13.7 Each marijuana establishment and responsible person must provide the Commissioner with a Certificate of Tax Clearance for corporate and personal income taxes. Information on obtaining a Certificate of Tax Clearance may be found at: https://revenue.delaware.gov/business-tax-forms/certificate-of-tax-clearance.

13.8 Recordkeeping and retention for Retail Marijuana Tax

13.8.1 Tax recordkeeping requirements

13.8.1.1 Retail marijuana stores must maintain all records and any information and data required to be entered into the seed-to-sale tracking system that are necessary to determine the correct tax liability under 4 Del.C. § 1382(b). All required records must be made available on request by Revenue or its authorized representatives.

13.8.1.2 Retail marijuana stores must maintain records of all tax-exempt sales of marijuana products to the holders of a registry identification card issued under Chapter 49A of Title 16 of the Delaware Code.

13.8.1.3 These records must include:

13.8.1.3.1 The date of the sale;

13.8.1.3.2 The medical marijuana program card number;

13.8.1.3.3 The taxed marijuana product category, or the product category used in the seed-to-sale tracking system;

13.8.1.3.4 The name of the marijuana product;

13.8.1.3.5 The unit price of the marijuana product;

13.8.1.3.6 The number of units sold; and

13.8.1.3.7 The total amount of the sale.

13.8.1.4 If a retail marijuana store retains required records in both electronic and hard-copy formats, the retail marijuana store must make the records available to Revenue in electronic format upon request.

13.8.1.5 Nothing in this regulation shall be construed to prohibit a retail marijuana store from demonstrating tax compliance with traditional hard-copy documents.

13.8.2 Retail marijuana store responsibility and discretionary authority

13.8.2.1 A retail marijuana store may create files solely for the use of Revenue. For example, if a data base management system is used, it is consistent with this regulation for the retail marijuana store to create and retain a file that contains the transaction-level detail from the data base management system and that meets the requirements of Section 7.0 of this regulation. The retail marijuana store should document the process that created the separate file to show the relationship between that file and the original records.

13.8.2.2 A retail marijuana store may contract with a third party to provide custodial or management services for the records. Such a contract shall not relieve the retail marijuana store of its responsibilities under this regulation.

13.9 With the exception of the retail sale of marijuana products, marijuana establishments are required to maintain or possess all business or other licenses required by Title 30 of the Delaware Code.

4 Del. Admin. Code § 5001-13.0

28 DE Reg. 226 (9/1/2024) (Final)