Collectives & Dispensaries Contacted by State Board of Equalization

[medicalgreen]

Recently a friend who manages a collective told me that the State Board of Equalization called them on the phone to ask about their tax status and seller's permits etc. He told me it actually sounded like a mafia shakedown. The lady demanded to know if the collective had a seller's permit, because she could not locate it on file. Now the strange part of this is the fact that the collective has been advised by a prominent attorney who helped draft prop. 215, that no business license or seller's permits are required, since sales are illegal in the state of California. He is an extremely well respected attorney and he believes sincerely that the paperwork helps implicate you in crimes.
Well, apparently this lady insisted that anyone who dispenses cannabis in California needs to pay sales tax and the collective is liable. She then insisted on getting an address to send a bill to. Well, I asked him how does she know how much to bill you and he told me "who knows?, we don't have a business license or a seller's permit, so I don't know how they can figure out how much we owe".

So my question to folks here is this.
Has anyone ever heard of this before? &
Why are they calling cannabis businesses directly? Do they also call all the dry cleaners in the city to see if they are operating with proper permits? or how about the illegal immigrants and their taco carts? Do they call each of them to ask if they have seller's permits, even though they issued them licenses when they aren't even legal citizens?
Does this sound like a mafia style shakedown of the cannabis clubs or what?
It sounds to me like the State Board of Equalization knows that everyone is committing illegal acts by selling cannabis so they can use intimidation to extort funds for something they have no right to collect legally.

My friend told them they do not engage in sales, and she insisted, "Oh yes you do!". To which he replied, "Oh no we don't", and she insisted again, Oh yes you do", in a sly hinting and pushing type tone in her voice....
Can you people believe this is actually happening?
Then he told her she is making a legal determination and she replied, "That's right, i am".

UNBELIEVABLE!!!

Any thoughts?

 

[vta]

Crazy but if they want their money they will stop at nothing until they get it, one way or another. Collectives & dispensaries are different as I am sure you know. Do you owe taxes can almost always be answered by the question, do you have a cash register? If it looks like a business and smells like a business, then they will see it that way and expect their cut. Were talking store front dispensaries.

Maybe have your friend talk to a different lawyer, second opinions are not just for health reasons.

 

[medicalgreen]

Crazy but if they want their money they will stop at nothing until they get it, one way or another. Collectives & dispensaries are different as I am sure you know. Do you owe taxes can almost always be answered by the question, do you have a cash register? If it looks like a business and smells like a business, then they will see it that way and expect their cut. Were talking store front dispensaries.

Maybe have your friend talk to a different lawyer, second opinions are not just for health reasons.

They run a collective. He just manages it. Nobody owns it. It belongs to the patients, and there is no register. They deliver to members only. The main point is, from what I can gather, is that all sales are illegal in California. So, therefore, you don't need a seller's permit, because it's illegal. The state board only collects the taxes because they can and people will pay them because they are in fear or do not know any better. There are numerous cases of dispensaries paying all their "proper" taxes, yet they get in trouble just the same. So, if the state cannot offer protection, then how can they extort taxes? The Attorney General states that it is not required to organize as a business, and yet you cannot get a seller's permit without getting a business license first, so in effect, the state mafia board of equalization is forcing people to break the law, plain and simple.

And furthermore, they do not know the full name of the manager, and the collective has no business license, so who are they going to fine, and how?

CRAZY!

 

[Hydrosun]

Crazy but if they want their money they will stop at nothing until they get it, one way or another.

so who are they going to fine, and how?

I think the answer is they will tax EVERYONE they can get their hands on. CA is not new to this game and money is really tight so their tactics will only get worse.

 

[DoobieDuck]

Bizarre!..thanks for posting Medicalgreen and VTA for your comments..DD

 

[vta]

They run a collective. He just manages it. Nobody owns it. It belongs to the patients, and there is no register. They deliver to members only. The main point is, from what I can gather, is that all sales are illegal in California. So, therefore, you don't need a seller's permit, because it's illegal. The state board only collects the taxes because they can and people will pay them because they are in fear or do not know any better. There are numerous cases of dispensaries paying all their "proper" taxes, yet they get in trouble just the same. So, if the state cannot offer protection, then how can they extort taxes? The Attorney General states that it is not required to organize as a business, and yet you cannot get a seller's permit without getting a business license first, so in effect, the state mafia board of equalization is forcing people to break the law, plain and simple.

And furthermore, they do not know the full name of the manager, and the collective has no business license, so who are they going to fine, and how?

CRAZY!

Sounds borderline to me...definitely should talk to another lawyer to get a second opinion. If the person getting the meds delivered has no other relation to the collective and is just 'paying' cash for meds, then I think the state will want a piece.

 

[medicalgreen]

Sounds borderline to me...definitely should talk to another lawyer to get a second opinion. If the person getting the meds delivered has no other relation to the collective and is just 'paying' cash for meds, then I think the state will want a piece.

I'm a member of their collective, so I have been through the routine. They have membership agreements, take "consideration", a (membership fee), so there is something of genuine value contributed and an established relationship. I don't want to mention the attorney's name, but I'm pretty sure he's one of the very best, if not the best there is.

My friend mentioned to me he thought is was possible that a competing collective or dispensary called them in to the board. Maybe it was not an ongoing system of checking with all dispensaries and clubs, but a selective type action, initiated by a jealous competitor.

He mentioned that a while back, when they advertised on craigs list, there was this stupid sounding stoner chick who would call from a restricted number, and she would do this to them everyday. She would call and yell at them that they are breaking the law, and they had better stop what they are doing, and they even claimed they were the police a couple times, but you could hear her whiny, strained, scratchy voice every time. She did this until they started posting in other places and left craigs list alone, due to the flagging that is always going on. So, it is a fact that the "competition", for anyone, if you are not these guys, in certain areas of medical providing, are sneaky, ruthless & down right rotten apples in the community. That's why it seems like that's what might be happening.

Wouldn't it be a shame, if certain clubs are actually working to keep other clubs from operating, by actually informing on them or calling the state board on them?

 

[justalilrowdy]

Our collective pays sales tax quarterly. We filed with the boe before we ever opened our doors. I know every collective I ever worked with payed sales tax to the boe.. and one local area collective that closed because they were not paying sales tax. I would not have thought of opening without the sellers permit to be as legit and acceptable as possible. Not paying the sales tax is asking for problems cuz the state is gonna wanna collect that money for past sales.

 

[medicalgreen]

Our collective pays sales tax quarterly. We filed with the boe before we ever opened our doors. I know every collective I ever worked with payed sales tax to the boe.. and one local area collective that closed because they were not paying sales tax. I would not have thought of opening without the sellers permit to be as legit and acceptable as possible. Not paying the sales tax is asking for problems cuz the state is gonna wanna collect that money for past sales.

Hey justalilrowdy, I won't debate you on this because i'm not a legal expert or a lawyer, but check it out,
If, for instance, I sell you a peach I grew on my tree, would that peach sale be considered a "taxable sale"?
Now, depending on how you answered the question, you have to explain your reasoning. What makes something a "taxable sale" and why are some things not taxable and some things are?
If you look up the LEGAL definition of a taxable sale, a sale cannot be conducted without a seller's permit. A sale without a seller's permit is not considered a "taxable sale" in tax and business law. The Seller's Permit determines whether or not you pay the taxes. You cannot get a seller's permit without a business license. So, why then did the attorney general say that it's not necessary for collectives to get a business license?
What they did, it appears to me, was to open the door for taxable sales when and if they occur legally, and if they do not occur legally, but you have a business license, you need a seller's permit and you have to pay those taxes then.
What i'm saying basically, is that 215 was not set up for businesses to exist, but later on, provisions were made for them as dispensaries. Those dispensaries do not operate as collectives do, they engage in business transactions that involve over the counter sales through their storefronts and they have obtained business licenses to be in those storefronts, so there are required sales taxes, but that does not affect collectives and cannot affect collectives that truly operate as such.
Does that make sense at all?

 

[justalilrowdy]

1000000 interpretations of prop 215... I didn't want to face a huge bill to the boe when they caught up to us and we want to be as legitimate as possible. its the road to social acceptability.

 

[Hydrosun]

CA does NOT tax prescription medication. Buy your Oxi from Walgreens NO TAX. Get Perkaset from CVS NO TAX.

CA does NOT TAX dried or fresh parsley sold at Vons or Ralph's. CA does tax fresh cut flowers sold in grocery stores.

Since the MJ plant is CONSUMED as a prescription medication by collective members it should be treated as other scrips Californians have to pay for every month. NO TAX.

The tricky part is when MJ is consumed not as a scrip, but recreationally. CA does tax beer and wine sold in their stores, so it would hold that MJ for rec use should be taxed.

There can be NO valid argument under current CA tax law for taxing transactions associated with providing medicine to CA patients, but just because CA has no laws taxing meds does NOT mean the B.O.E. will leave anyone alone. Because as some have stated many collectives pay sales tax, so the B.O.E. now expects it from all.

 

[kmk420kali]

CA does NOT tax prescription medication. Buy your Oxi from Walgreens NO TAX. Get Perkaset from CVS NO TAX.

CA does NOT TAX dried or fresh parsley sold at Vons or Ralph's. CA does tax fresh cut flowers sold in grocery stores.

Since the MJ plant is CONSUMED as a prescription medication by collective members it should be treated as other scrips Californians have to pay for every month. NO TAX.

The tricky part is when MJ is consumed not as a scrip, but recreationally. CA does tax beer and wine sold in their stores, so it would hold that MJ for rec use should be taxed.

There can be NO valid argument under current CA tax law for taxing transactions associated with providing medicine to CA patients, but just because CA has no laws taxing meds does NOT mean the B.O.E. will leave anyone alone. Because as some have stated many collectives pay sales tax, so the B.O.E. now expects it from all.

It is not a Prescription, it is only a Recommendation--

 

[Hydrosun]

It is not a Prescription, it is only a Recommendation--

So they REQUIRE you to PAY a DR. They REQUIRE you to REGISTER with the state. BUT since you use a different word RECOMMENDATION as opposed to PRESCRIPTION a TAX is DUE?

Well my friend if it walks like a duck, quacks like a duck, etc. etc. Your semantical argument does not trump the INTENT of CA tax law.

Fair is fair, I mentioned CA taxes beer and wine but NOT Oxi, Xanax, Prozac, etc.

 

[kmk420kali]

So they REQUIRE you to PAY a DR. They REQUIRE you to REGISTER with the state. BUT since you use a different word RECOMMENDATION as opposed to PRESCRIPTION a TAX is DUE?

Well my friend if it walks like a duck, quacks like a duck, etc. etc. Your semantical argument does not trump the INTENT of CA tax law.

Fair is fair, I mentioned CA taxes beer and wine but NOT Oxi, Xanax, Prozac, etc.

Sorry man...but I am just giving the facts...I did not make them up, nor do I support them--
No Dr in the US can "Prescribe" any medication that is not FDA approved--

 

[Hydrosun]

Sorry man...but I am just giving the facts...I did not make them up, nor do I support them--
No Dr in the US can "Prescribe" any medication that is not FDA approved--

That is true, prescribing a Schedule One narcotic would make them a felon, just as everyone who grows a single MJ plant is a felon for breaking Federal schedule one drug laws.

This thread was about taxation and the true nature of CA's taxing scheme is to EXEMPT food and medicine. Recreational intoxicants and over the counter remedies are TAXED.

MMJ in CA is NOT over the counter nor is it sold as recreational intoxicant ergo according to CA law MMJ is not subject to taxation.

Just thought I'd reintroduce logic to the debate.

 

[popngen]

Has anyone considered that it may be someone trying to run a scam? I would ask the OP to confirm the number and the agency the person called from to be sure.

 

[medicalgreen]

Has anyone considered that it may be someone trying to run a scam? I would ask the OP to confirm the number and the agency the person called from to be sure.

Indeed!

Did a google lookup. She was for real. It's the State Boards phone number.

 

[Toyot4]

Marijuana is not a recognized medicine, health insurance does not cover medical marijuana use. It can not be treated like prescription drugs that you have mentioned.

Just because these prescription drugs that you have mentioned are not taxed does not mean that they are doing the right thing there either.

 

[kmk420kali]

That is true, prescribing a Schedule One narcotic would make them a felon, just as everyone who grows a single MJ plant is a felon for breaking Federal schedule one drug laws.

This thread was about taxation and the true nature of CA's taxing scheme is to EXEMPT food and medicine. Recreational intoxicants and over the counter remedies are TAXED.

MMJ in CA is NOT over the counter nor is it sold as recreational intoxicant ergo according to CA law MMJ is not subject to taxation.

Just thought I'd reintroduce logic to the debate.

Wow, you are funny!! You get all agro over information--
First off, non-prescription medicinal herbs are subject to taxation...keep in mind, we are only talking sales tax here...you REALLY have that much of a prob paying that??
So...anything that does not require a Prescription, is, by definition..."Over the Counter"--
Now...what is this "Logic" you speak of??

 

[Hydrosun]

Marijuana is not a recognized medicine, health insurance does not cover medical marijuana use. It can not be treated like prescription drugs that you have mentioned.

Just because these prescription drugs that you have mentioned are not taxed does not mean that they are doing the right thing there either.

It CAN be treated like any script, but it is not. There is no evidence in the world that it CAN NOT be treated the same as all other scripts.

Just because novel treatments are not covered by insurance does not mean the treatment are non medical in nature. Insurance coverage is not a qualifier for the sales tax in CA.

Wow, you are funny!! You get all agro over information--
First off, non-prescription medicinal herbs are subject to taxation...keep in mind, we are only talking sales tax here...you REALLY have that much of a prob paying that??
So...anything that does not require a Prescription, is, by definition..."Over the Counter"--
Now...what is this "Logic" you speak of??

First off, non-prescription herbs may or may not be taxed. As I mentioned parsley, cilantro, garlic, basil, etc. are sold daily fresh and dried in many CA store fronts all FREE from sales tax.

MJ in CA requires a script or recommendation that is why they have special ID cards for stoners in CA. If MJ were available OTC, I could walk into Walgreens and buy some.

The logic I speak of is "If I need a Dr.'s permission to consume MJ or Oxi; then they are both scrips." I personally don't have problems with sales tax on food or medicine; however the CA tax scheme has always EXEMPTED these items.