Cannabis Business Accountants in Vermont

Key Points:

• Services Offered: Tax planning and compliance, bookkeeping, IRS representation, cost segregation, and tax credits and incentives.
• Taxation: Cannabis sales can be taxed up to 21% with a 6% state sales tax, a 14% excise tax, and an optional 1% local tax.
• Distinctions in Accounting for Cannabis, CBD, and Hemp Businesses: Expense deductibility, costing regulation, and tax credits.

Analyzing the Role and Impact of Cannabis CPAs in Vermont's Cannabis Industry

A Cannabis CPA is a Certified Public Accountant with expertise in cannabis industry regulations and tax challenges. In Vermont, where there are around 4 medical and over 70 recreational cannabis dispensaries, these specialists provide essential financial guidance to help businesses navigate complex compliance and tax requirements.

• Strategic Tax Planning and Compliance: Cannabis businesses have distinct tax requirements, and cannabis CPAs provide tailored tax planning and preparation, ensuring both compliance and optimized financial performance.
• Customized Accounting and Bookkeeping Services: With expertise in cannabis-specific regulations, cannabis CPAs offer tailored accounting and bookkeeping services, keeping businesses compliant as the legal landscape evolves.
• Representation with the IRS for Cannabis Businesses: Cannabis CPAs assist businesses with IRS representation, utilizing their knowledge of marijuana-specific regulations to help clients remain compliant with all required filings.
• Cost Segregation Studies for Tax Efficiency: Cannabis CPAs conduct cost segregation studies, which help businesses in the marijuana sector maximize tax deductions, potentially lowering tax liabilities.
• Maximizing Tax Credits and Incentives: Cannabis CPAs identify and maximize available tax credits and incentives, assisting businesses in reducing their tax burdens.

• Are you a Vermont-licensed CPA offering services to cannabis-related businesses? Request to be listed .

Cannabis Taxation in Vermont

• Sales Tax: Vermont’s general sales tax rate is 6%, with an additional 1% local option tax in some municipalities, resulting in a potential 7% tax on general sales.
• Excise Tax on Cannabis: Cannabis retail sales in Vermont incur a 14% excise tax, in addition to the 6% sales tax and any local tax.
• Combined Cannabis Tax Rate: In municipalities with a local option tax, the cumulative tax rate on cannabis sales can reach 21% (6% state sales tax + 1% local option tax + 14% excise tax).

Distinctions in Accounting for Cannabis, CBD, and Hemp Businesses

• Expense Deductibility: Cannabis businesses are limited by Section 280E of the Internal Revenue Code, which restricts deductions largely to the cost of goods sold (COGS). Hemp and CBD businesses, on the other hand, are eligible for a wider range of deductible expenses.
• Inventory Costing Regulations: Cannabis companies must comply with specific inventory costing rules under Section 471, without the advantages offered by Section 263A. In contrast, hemp and CBD businesses can employ full absorption costing, which allows the inclusion of indirect costs.
• Eligibility for Tax Credits: While hemp and CBD businesses may qualify for federal tax credits, such as the Research and Development (R&D) credit, cannabis businesses are ineligible for these due to federal restrictions.