Medical cannabis sold to qualifying patients

From the 2024 DOR Tax Exemption Study

Det. No. 22-0129, 44 WTD 046 (May 19, 2025) 47 FINDINGS OF FACT Taxpayer is a licensed marijuana retailer with a medical marijuana endorsement doing business in . . . , Washington. The Department’s Audit Division investigated Taxpayer’s books and records for the period of January 1, 2017, through June 30, 2020 (Audit Period). The Department requested the following to aid with its investigation: reports from the point of sales system, federal income tax returns, credit card statements for two business accounts, documentation for deductions taken, and supporting documentation for consumable purchases of business-use tangible personal property. Taxpayer provided Audit Division with the following: the requested report from the point of sales system, credit card statements, and purchase receipts for consumable purchases. After comparing Taxpayer’s returns and the relevant books and records, Audit Division adjusted for disallowed deductions, unreported income, and deferred retail sales tax and/or use tax on purchases of consumable tangible personal property. Audit Division disallowed all deductions taken by Taxpayer. Taxpayer regularly took . . . deductions on its excise tax filings duri