West Virginia Cannabis Tax Guide: 2025 Edition Updated July 1st, 2025

Key Points

• Dispensaries pay a 10% statewide excise (privilege) tax on all medical cannabis gross receipts.
• Medical cannabis is exempt from West Virginia’s 6% state sales and use tax, and from any local sales taxes, once the 10% excise tax is paid.
• West Virginia conforms to IRC §280E for state income tax purposes; cannabis businesses cannot deduct ordinary business expenses on their state returns.
• Excise tax returns and payments are due quarterly — January 20, April 20, July 20, and October 20 — via the MyTaxes electronic portal.
• Non‑compliance (late filing/payment) triggers interest, penalties, liens, and potential license suspension or revocation.
• Maintain tax records for at least three years after filing (unless extended by audit).

1. State Income Tax & §280E

West Virginia personal and corporate income taxes start with federal taxable income as defined in the Internal Revenue Code. Because §280E disallows deductions for cannabis businesses at the federal level, there is no state carve‑out:

• No deductions for rent, payroll, utilities, advertising, or other ordinary expenses when computing WV taxable income.
• Depreciation and amortization are also disallowed.
• Plan for higher effective tax rates, increased audit risk, and the need to set aside sufficient cash for quarterly estimated payments.

2. Excise (“Privilege”) Tax

• Rate: 10% of gross receipts from medical cannabis sales, assessed at the dispensary level.
• Uniformity: Applies statewide with no local variations.
• Responsible Party: Dispensaries collect and remit the tax; cultivators and processors do not.
• Customer Pricing: Tax must not be separately itemized or passed through beyond inclusion in the total price.

3. Sales & Use Tax Exemption

• Once the 10% excise tax is paid, medical cannabis is fully exempt from:
  • West Virginia’s 6% state sales/use tax.
  • Any local/county/municipal sales taxes (up to 1%).
    • In practice, all medical cannabis sales in Beckley, Charleston, Huntington, Morgantown, and elsewhere carry zero additional sales tax.

4. Documentation & Record-Keeping

• Quarterly Filing: Every quarter (even if sales are zero), file the excise tax return by the due date.
• Record Retention: Keep sales journals, tax returns, bank statements, and supporting invoices for at least three years after the filing date, or longer if under audit.

5. Filing & Payment Deadlines

• Use the form prescribed under WV Code §16A-9, available at tax.wv.gov.

6. Penalties & Compliance Risks

• Late Payment: Accrues interest and additions to tax daily; unpaid balances become liens on dispensary property.
• Late Filing: Additional penalties and risk of administrative fines.
• Non‑Payment: Possible license suspension or revocation by the Office of Medical Cannabis.
• Audit Exposure: Cannabis businesses face heightened scrutiny; maintain complete and accurate records.

7. Calculating Your Tax Liability

1. Verify the product is medical cannabis (sales tax exempt).
2. Multiply each sale’s gross receipts by 10%.
3. Sum the tax due for all sales in the quarter.
4. File your return and remit payment by the applicable quarterly due date.

8. Key Trade Associations

• National Cannabis Industry Association (NCIA) – National policy with local support.
• Minority Cannabis Business Association (MCBA) – Cultivation and manufacturing best practices.

9. Government Contacts

West Virginia Office of Medical Cannabis 
Phone: 304-356-5090
Address: 350 Capitol Street, Room 523, Charleston, WV 25301
Email: medcanwv@wv.gov

West Virginia Tax Division

State Phone Directory
MyTaxes Online Login

10. Financial Calendar Overview

This guide reflects law as of July 1, 2025. Always verify with the IRS and WV Tax Division’s office for updates or special circumstances.

Disclaimer: For informational purposes only. Consult tax and legal professionals before making business or compliance decisions.