Cannabis Business Accountants in Ohio

Key Points:

• Tax Rates: Ohio’s cannabis tax includes a 5.75% sales tax plus local taxes, with a 10% excise tax on recreational cannabis only.
• Primary Services Offered: IRS representation, financial reporting, tax and legal compliance

Ohio has over 120 licensed cannabis businesses certified for operation. These businesses rely on cannabis accountants with specialized expertise in the cannabis sector. Cannabis CPA’s are well-versed in the unique financial and regulatory challenges these businesses face, including complex tax codes and compliance standards.

• Are you an Ohio-licensed CPA offering services to cannabis-related businesses? Request to be listed .

Tax Rates for Cannabis in Ohio

• Sales Tax: Ohio’s state sales tax is set at 5.75%, with additional local taxes bringing the combined rate to between 6.5% and 8%.
• Cannabis Excise Tax: A 10% excise tax applies to recreational cannabis in Ohio, on top of the standard state sales tax, bringing the effective rate for recreational purchases to 15.75%, not including local taxes. Medical cannabis is subject only to the 5.75% sales tax plus any local tax, with no excise tax.

Variations in Accounting Services

• Cannabis Businesses: Businesses handling products with THC content exceeding 0.3% face unique federal restrictions. Under IRC Section 280E, they cannot deduct standard business expenses like administrative or marketing costs, which results in higher taxable income and increased tax burdens. Accurate cost accounting is essential to optimize deductions within the Cost of Goods Sold (COGS) framework.
• Hemp and CBD Businesses: These businesses, working with cannabis products containing no more than 0.3% THC, enjoy more favorable tax conditions. They are exempt from IRC Section 280E and can deduct ordinary business expenses, including marketing, administrative, and operational costs. However, they must still adhere to IRC Section 471 inventory rules and comply with state-specific regulations.

Cannabis CPA’s Primary Services

• IRS Audit Representation: Assisting businesses in audits and other engagements with the IRS.
• Asset Depreciation Studies: Identifying tax benefits by accelerating asset depreciation, reducing tax liabilities, and enhancing profitability.
• Financial Recordkeeping and Reporting: Keeping precise financial records, balancing accounts, and preparing key financial statements.
• Tax Credits and Incentives Utilization: Helping businesses locate and leverage applicable tax credits and incentives.
• Cannabis Legal Compliance: Assisting businesses in meeting federal, state, and local regulatory standards.

Benefits of Working with a Qualified Cannabis Accountant

A knowledgeable cannabis accountant ensures strict compliance with complex federal, state, and local regulations, helping businesses avoid penalties. They provide tax optimization strategies to minimize liabilities unique to the industry, along with expert financial management for budgeting, cash flow, and planning. This support allows business owners to focus on operations.