Cannabis Taxes

Cannabis Picture.jpg

Legal References

Electronic Services

Definitions

"Cannabis" means marijuana, hashish, and other substances that are identified as including any parts of the plant Cannabis sativa and including derivatives or subspecies, such as indica, of all strains of cannabis, whether growing or not; the seeds thereof, the resin extracted from any part of the plant; and any compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin, including tetrahydrocannabinol (THC) and all other naturally produced cannabinol derivatives, whether produced directly or indirectly by extraction; however, "cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted from it), fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination. "Cannabis" does not include industrial hemp as defined and authorized under the Industrial Hemp Act. "Cannabis" also means concentrate and cannabis-infused products.

"Cannabis-infused product" means a beverage, food, oil, ointment, tincture, topical formulation, or another product containing cannabis that is not intended to be smoked.

"Cultivation center" means a facility operated by an organization or business that is licensed by the Department of Agriculture to cultivate, process, transport (unless otherwise limited by Public Act 101-0027), and perform other necessary activities to provide cannabis and cannabis-infused products to cannabis business establishments.

"Dispensing organization" means a facility operated by an organization or business that is licensed by the Department of Financial and Professional Regulation to acquire cannabis from a cultivation center, craft grower, processing organization, or another dispensary for the purpose of selling or dispensing cannabis, cannabis-infused products, cannabis seeds, paraphernalia, or related supplies under this Act to purchasers or to qualified registered medical cannabis patients and caregivers. As used in this Act, dispensary organization shall include a registered medical cannabis organization as defined in the Compassionate Use of Medical Cannabis Pilot Program Act or its successor Act that has obtained an Early Approval Adult Use Dispensing Organization License.

"Medical cannabis" means cannabis and its constituent cannabinoids, such as tetrahydrocannabinol (THC) and cannabidiol (CBD), used as an herbal remedy or therapy to treat disease or alleviate symptoms. Medical cannabis can be administered by a variety of routes, including, but not limited to: vaporizing or smoking dried buds; administering tinctures or tonics; applying topicals such as ointments or balms; consuming infused food products, such as soda or teas; or taking capsules.

"Purchaser" means a person 21 years of age or older who acquires cannabis for a valuable consideration. "Purchaser" does not include a cardholder under the Compassionate Use of Medical Cannabis Pilot Program Act.

 "Sales price" means the consideration for a sale valued in money whether received in money or otherwise, including cash, credits, property, and services, and shall be determined without any deduction on account of the cost of the property sold, the cost of materials used, labor or service cost or any other expense whatsoever.

See 86 Ill. Admin. Code Part 422.105, 86 Ill. Admin. Code Part 423.105, 86 Ill. Admin. Code Part 424.105, 86 Ill. Admin. Code Part 425.105, and  86 Ill. Admin. Code section 429.105  for full listings.

Tax rates

For Cannabis Cultivation Privilege Tax rate or Cannabis Purchaser Excise Tax rate, use the Tax Rate table.

For Medical Cannabis Cultivation Privilege Tax rate and Retailers' Occupation Tax, use the Tax Rate Database to look up location specific tax rates. Depending upon the location of the sale, the actual sales tax rate may be higher than the fundamental rate because of home rule, non-home rule, mass transit, park district, county public safety, public facilities, mental health, substance abuse, or transportation, Municipal and County Cannabis Retailers' Occupation Taxes, and county school facility tax.

Local taxes

Units of local government may impose taxes or fees, which the department does not collect. Contact your units of local government (county, municipal, mass transit, etc.) to determine if you must pay any additional taxes or fees not listed below. The following local taxes, which the department collects, may be imposed. Except as noted below, the preprinted rate on the return will include any locally imposed taxes.

  • Business District Tax
  • Chicago Home Rule Municipal Soft Drink Retailers' Occupation Tax
  • Chicago Home Rule Use Tax on titled and registered items
  • County Motor Fuel Tax
  • Home Rule County Taxes
  • Home Rule or Non-home Rule Municipal Taxes
  • Mass Transit District Taxes (Metro-East Mass Transit (MED) Taxes and Regional Transportation Authority (RTA) Taxes)
  • Metro-East Park and Recreation District Taxes
  • Metropolitan Pier and Exposition Authority (MPEA) Food and Beverage Tax
  • Special County Retailers' Occupation Tax for Public Safety, Public Facilities, Mental Health, Substance Abuse, or Transportation 
  • County School Facility Tax

Filing and payment requirements

Returns

Adult use cannabis cultivators or craft growers must use Form CC-1, Adult Use Cannabis Cultivation Privilege Tax Return, to report sales of adult use cannabis products. Adult use cultivators with multiple cultivation sites must also complete Schedule CC-2, Multiple Site Form for Adult Use Cannabis Cultivators, to report the taxable receipts from each cultivation site.

Cannabis cultivators selling medical cannabis must file Form MC-1, Medical Cannabis Cultivation Privilege Tax Return, to report sales of medical cannabis. Cultivators with multiple cultivation sites must also complete Schedule MC-2, Medical Cannabis Sales, to report sales from each cultivation site.

Cultivators with sales of both medical and adult use cannabis must file Form MC-1, Form CC-1, and any corresponding schedules that apply.

Cannabis dispensaries must file form CD-1, Cannabis Dispensary Tax Return, to report sales of medical and adult use cannabis. Multiple site dispensaries must also file Schedule CD-2, Sales and Use Tax Multiple Site Form for Cannabis Dispensaries, to calculate the Sales and Use Tax due on sales of adult use and medical cannabis from each dispensing site. Multiple site dispensaries must also file Schedule CD-3, Cannabis Purchaser Excise Tax Multiple Site Form for Cannabis Dispensaries, to report sales of adult use cannabis subject to Cannabis Purchaser Excise Tax from each dispensing site.

Dispensaries are also required to report their total receipts of cannabis and non-cannabis products sold on Form ST-1, Sales and Use Tax and E911 Surcharge Return. Receipts from cannabis sales should be claimed as a deduction on Schedule A of Form ST-1 and reported on Form CD-1.

Cannabis returns, along with any payment owed, are due on or before the 20th day of the month following the end of the reporting period. If the due date falls on a weekend or holiday, the return and payment are due the next business day.

Illinois law requires Forms CC-1, CD-1, and MC-1, and their corresponding schedules, to be filed electronically using MyTax Illinois at mytax.illinois.gov.

Payments

All cultivators, craft growers, and dispensaries will be required to make quarter-monthly (accelerated) estimated payments as of January 1, 2020. Quarter-monthly (accelerated) payments are due on or before the 7th, 15th, 22nd, and the last day of each month that a tax liability has occurred. Each quarter-monthly (accelerated) payment shall be the lower of either 22.5% percent of the actual liability for the month or 25% percent of the liability for the same month of the preceding year. If there is no liability in the same month of the preceding year, no quarter-monthly (accelerated) payment will be due. IDOR will notify the taxpayer when quarter-monthly (accelerated) payments are required.

Payments must be made electronically unless a waiver has been issued. Businesses that cannot pay electronically are required to request a waiver of the electronic payment mandate. Complete Form IL-900-EW, Electronic Waiver Request, which is available from IDOR by request at 217 782-7897, 1 800 732-8866, or 217 782-3336.

Additional Forms & Resources

Questions?