In Illinois, recreational excise taxes are based on an individual product's potency. This article shows how to set up an Illinois recreational excise tax and how to categorize products based on potency.
If you are integrated with Dutchie E-Commerce, be sure to also set up a potency tax in E-Commerce.
Things to know
- This functionality applies only to operators in Illinois.
- For recreational tax reporting, go to Reports > Taxes > IL Recreation Tax Rate by Package. You may need to adjust the columns using the cog wheel to see the new sections Product Category, Master Category, and THCa.
Set up your recreational excise tax
- Go to Settings > Taxes & compliance
- There should be a pre-configured tax rate with the Rate type set to Illinois Recreational Excise Tax. If not, create one.
- Save.
Assign tax category to all cannabis products and inventory
Tax categories do not automatically apply based on a package's lab results. You must assign tax categories to ensure recreational taxes are applied correctly.
For each product in your Catalog, select the appropriate Default IL tax category:
- For edibles, select Infused
- For other product types, choose either Low THC (<35%) or High THC (>35%) depending on its lab results.
This product-level tax category will also apply to associated inventory packages. If, for example, a particular package of a product that is normally less than 35% THC happens to be just above 35% THC, you can assign that individual package to the High THC category without changing the product-level default or any other packages:
- Find the package in your Inventory list and select it.
- Scroll to the IL tax category dropdown and select the appropriate category:
- Save.