Connecticut | Potency-based taxes for recreational sales in Dutchie POS
This article applies to Dutchie POS.
This article will help you create and correctly apply potency-based tax rates required for recreational sales in Connecticut.
Things to know
- The state of Connecticut requires a fractional-cent tax per milligram of Total THC in cannabis products sold to recreational customers.
- Once a potency-based tax rate is created, Dutchie POS automatically calculates the tax amount at the point of sale based on the Lab results of each inventory package.
- Products marked as Cannabis = Yes in the product catalog will not be sellable if the THC value is missing from the lab results for the associated package, and a "missing potency" error will appear at the point of sale. You can resolve this error by entering lab results for the product.
Update your customer types and tax categories
Before creating potency-based tax rates, add a "Recreational" Customer type and create separate Tax categories to correspond to the different per-milligram tax rates for different Product categories (edibles, flower, etc.).
Create a potency-based tax rate
- Navigate to Settings > Taxes and compliance.
- Click Add Rate.
- In the Rate Type field, select Potency (per mg THC).
- In the Rate amount field, enter the flat rate per milligram for the product category. For example, an edible that has 124 milligrams of THC at a tax rate of ¢2.75 per milligram would have $3.41 in tax applied.
- For Customer types, select Apply to selected types, then check the box for Recreational.
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Product categories,Apply to selected categories, then select the Tax category.
- Click Save.
Make sure lab results are entered for each product
Important note about product potencies
Our team is working to resolve an issue that prevents Dutchie POS from pulling test results accurately from BioTrack. Until further notice:
- Manually calculate and enter the potencies of all products to ensure accurate tax collection.
- Even though you’re entering potencies manually, the BioTrack Integration setting Use BioTrack Lab Data should still be set to Yes and Default BioTrack Labs in Receive should be set to No.
- Navigate to Products > Inventory.
- Select a product.
- Click the Lab results button.
- In the Cannabinoids section, make sure the THC field is accurately filled in.
- If you enter the THCA and THC-D9 values, Dutchie POS automatically calculates and fills in the value for the THC field.
- Or, you can manually fill in the THC field and leave THCA and THC-D9 blank.
- Once all testing data has been entered for the product, click Save.
How potency-based taxes are calculated and applied
Dutchie POS calculates taxes based on the formula: Total THC = (THCA x 0.877) + THC-D9.
Total THC means the sum of the percentage by weight of tetrahydrocannabinolic acid, multiplied by 0.877, plus the percentage by weight of tetrahydrocannabinol.
After an item that applies to the potency-based tax rate is scanned at the point of sale, the tax is automatically applied to the item based on its potency level.