2023 Connecticut General Statutes › Title 12 - Taxation › Chapter 214c - Cannabis Taxes › Section 12-330ll. - Tax on total THC. Returns. Penalties. Regulations, policies and procedures. Deposit of tax.

(a) As used in this section and sections 12-330mm and 12-330nn:
(1) “Cannabis” has the same meaning as provided in section 21a-420;
(2) “Cannabis concentrate” has the same meaning as provided in section 21a-420;
(3) “Cannabis edible product” means a product containing cannabis or cannabis concentrate, combined with other ingredients, that is intended for use or consumption through ingestion, including sublingual or oral absorption;
(4) “Cannabis plant material” has the same meaning as provided in section 21a-279a;
(5) “Cannabis retailer” means “retailer”, as defined in section 21a-420;
(6) “Consumer” has the same meaning as provided in section 21a-420;
(7) “Cultivator” has the same meaning as provided in section 21a-420;
(8) “Delivery service” has the same meaning as provided in section 21a-420;
(9) “Dispensary facility” has the same meaning as provided in section 21a-420;
(10) “Food and beverage manufacturer” has the same meaning as provided in section 21a-420;
(11) “Hybrid retailer” has the same meaning as provided in section 21a-420;
(12) “Micro-cultivator” has the same meaning as provided in section 21a-420;
(13) “Municipality” has the same meaning as provided in section 21a-420;
(14) “Palliative use” has the same meaning as provided in section 21a-408;
(15) “Producer” has the same meaning as provided in section 21a-420;
(16) “Product manufacturer” has the same meaning as provided in section 21a-420;
(17) “Product packager” has the same meaning as provided in section 21a-420;
(18) “Social Equity Council” has the same meaning as provided in section 21a-420;
(19) “Total THC” has the same meaning as provided in section 21a-240; and
(20) “Transporter” has the same meaning as provided in section 21a-420.
(b) (1) For the privilege of making any sales of cannabis in this state, a tax is hereby imposed on each cannabis retailer, hybrid retailer or micro-cultivator at the following rates:
(A) Cannabis plant material, at the rate of six hundred twenty-five-thousandths of one cent per milligram of total THC, as reflected on the product label;
(B) Cannabis edible products, at the rate of two and seventy-five-hundredths cents per milligram of total THC, as reflected on the product label; and
(C) Cannabis, other than cannabis plant material or cannabis edible products, at the rate of nine-tenths of one cent per milligram of total THC, as reflected on the product label.
(2) The tax under this section:
(A) Shall be collected from the consumer, except as provided under subparagraphs (B) and (D) of this subdivision, by the cannabis retailer, hybrid retailer or micro-cultivator at the time of sale and such tax reimbursement, termed “tax” in this section, shall be paid by the consumer to the cannabis retailer, hybrid retailer or micro-cultivator. Each cannabis retailer, hybrid retailer or micro-cultivator shall collect from the consumer the full amount of the tax imposed by this section or an amount equal to the average equivalent thereof to the nearest amount practicable. Such tax shall be a debt from the consumer to the cannabis retailer, hybrid retailer or micro-cultivator, when so added to the original sales price, and shall be recoverable at law in the same manner as other debts except as provided in section 12-432a.
(B) Shall not apply to the sale of cannabis for palliative use;
(C) Shall not apply to the transfer of cannabis to a transporter for transport to any other cultivator, micro-cultivator, food and beverage manufacturer, product manufacturer, product packager, dispensary facility, cannabis retailer, hybrid retailer or producer;
(D) Shall not apply to the sale of cannabis by a delivery service to a consumer;
(E) Shall be in addition to the taxes imposed under section 12-330mm and chapter 219; and
(F) When so collected, shall be deemed to be a special fund in trust for the state until remitted to the state.
(c) On or before the last day of each month in which a cannabis retailer, hybrid retailer or micro-cultivator may legally sell cannabis other than cannabis for palliative use, each such cannabis retailer, hybrid retailer or micro-cultivator shall file a return with the Department of Revenue Services. Such return shall be in such form and contain such information as the Commissioner of Revenue Services prescribes as necessary for administration of the tax under this section and shall be accompanied by a payment of the amount of the tax shown to be due thereon. Each cannabis retailer, hybrid retailer and micro-cultivator shall file such return electronically with the department and make such payment by electronic funds transfer in the manner provided by chapter 228g, to the extent possible.
(d) If any cannabis retailer, hybrid retailer or micro-cultivator fails to pay the amount of tax reported due on its return within the time specified under this section, there shall be imposed a penalty equal to twenty-five per cent of such amount due and unpaid, or two hundred fifty dollars, whichever is greater. Such amount shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment. Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this section when it is proven to the commissioner's satisfaction that the failure to pay any tax was due to reasonable cause and was not intentional or due to neglect. Any penalty that is waived shall be applied as a credit against tax liabilities owed by the cannabis retailer, hybrid retailer or micro-cultivator.
(e) Each person, other than a cannabis retailer, hybrid retailer or micro-cultivator, who is required, on behalf of such cannabis retailer, hybrid retailer or micro-cultivator, to collect, truthfully account for and pay over a tax imposed on such cannabis retailer, hybrid retailer or micro-cultivator under this section and who wilfully fails to collect, truthfully account for and pay over such tax or who wilfully attempts in any manner to evade or defeat the tax or the payment thereof, shall, in addition to other penalties provided by law, be liable for a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over, including any penalty or interest attributable to such wilful failure to collect or truthfully account for and pay over such tax or such wilful attempt to evade or defeat such tax, provided such penalty shall only be imposed against such person in the event that such tax, penalty or interest cannot otherwise be collected from such cannabis retailer, hybrid retailer or micro-cultivator. The amount of such penalty with respect to which a person may be personally liable under this section shall be collected in accordance with the provisions of section 12-555a and any amount so collected shall be allowed as a credit against the amount of such tax, penalty or interest due and owing from the cannabis retailer, hybrid retailer or micro-cultivator. The dissolution of the cannabis retailer, hybrid retailer or micro-cultivator shall not discharge any person in relation to any personal liability under this section for wilful failure to collect or truthfully account for and pay over such tax or for a wilful attempt to evade or defeat such tax prior to dissolution, except as otherwise provided in this section. For purposes of this section, “person” includes any individual, corporation, limited liability company or partnership and any officer or employee of any corporation, including a dissolved corporation, and a member of or employee of any partnership or limited liability company who, as such officer, employee or member, is under a duty to file a tax return under this section on behalf of a cannabis retailer, hybrid retailer or micro-cultivator or to collect or truthfully account for and pay over a tax imposed under this section on behalf of such cannabis retailer, hybrid retailer or micro-cultivator.
(f) The provisions of sections 12-548, 12-551 to 12-554, inclusive, and 12-555a shall apply to the provisions of this section in the same manner and with the same force and effect as if the language of said sections had been incorporated in full into this section and had expressly referred to the tax under this section, except to the extent that any provision is inconsistent with a provision in this section.
(g) The commissioner shall not issue a refund of any tax paid by a cannabis retailer, hybrid retailer or micro-cultivator under this section.
(h) The commissioner may adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section and sections 12-330mm and 12-330nn. Notwithstanding the provisions of sections 4-168 to 4-172, inclusive, prior to adopting any such regulations, the commissioner shall issue policies and procedures, which shall have the force and effect of law, to implement the taxes imposed under this section and sections 12-330mm and 12-330nn. At least fifteen days prior to the effective date of any policy or procedure issued pursuant to this subsection, the commissioner shall post such policy or procedure on the department's Internet web site and submit such policy or procedure to the Secretary of the State for posting on the eRegulations System. Any such policy or procedure shall no longer be effective upon the adoption of such policy or procedure as a final regulation in accordance with the provisions of chapter 54 or forty-eight months of the effective date of this section, whichever is earlier.
(i) The tax received by the state under this section shall be deposited as follows:
(1) For the fiscal years ending June 30, 2022, and June 30, 2023, in the cannabis regulatory and investment account established under section 21a-420f;
(2) For the fiscal years ending June 30, 2024, June 30, 2025, and June 30, 2026, sixty per cent of such tax received in the Social Equity and Innovation Fund established under section 21a-420f, twenty-five per cent of such tax received in the Prevention and Recovery Services Fund established under section 21a-420f and fifteen per cent in the General Fund;
(3) For the fiscal years ending June 30, 2027, and June 30, 2028, sixty-five per cent of such tax received in the Social Equity and Innovation Fund established under section 21a-420f, twenty-five per cent of such tax received in the Prevention and Recovery Services Fund and ten per cent in the General Fund; and
(4) For the fiscal year ending June 30, 2029, and each fiscal year thereafter, seventy-five per cent of such tax received in the Social Equity and Innovation Fund established under section 21a-420f and twenty-five per cent of such tax received in the Prevention and Recovery Services Fund established under section 21a-420f.
(j) At the close of each fiscal year in which the tax imposed under the provisions of this section are received by the commissioner, the Comptroller is authorized to record as revenue for such fiscal year the amounts of such tax that are received by the commissioner not later than five business days from the July thirty-first immediately following the end of such fiscal year.
(June Sp. Sess. P.A. 21-1, S. 125; P.A. 22-146, S. 5.)
History: June Sp. Sess. P.A. 21-1 effective July 1, 2021; P.A. 22-146 amended Subsec. (i)(1) by adding provision re deposit of tax received for fiscal year ending June 30, 2023, in cannabis regulatory and investment account established under Sec. 21a-420f, deleted provision re deposit of such tax received for such fiscal year in General Fund, and made conforming changes, effective May 7, 2022.