New Mexico regulators have brought 80 cannabis dispensary licensees into compliance on their tax filings since the state Taxation and Revenue Department began contacting retailers over the summer to notify them that they had failed to file one or more tax returns since registering with the department.
“Cannabis is a relatively new industry with many new players who may be struggling to get their businesses up and running,” Taxation and Revenue Secretary Stephanie Schardin Clarke said in a public statement. “We are here to assist taxpayers to voluntarily comply with the tax law, but cannabis retailers must also make a good faith effort to comply.”
New Mexico levies a gross receipts tax and cannabis excise tax on adult-use sales, and once businesses are registered with the Taxation and Revenue Department, they must file gross receipts tax and excise tax returns, even if they have no sales. Dispensary licensees must be in good standing with taxes to renew their licenses with the Regulation and Licensing Department.
The Taxation and Revenue and Regulation and Licensing departments work together to compare active cannabis license holders with other data sources to ensure compliance. More than 100 licensees have not yet complied, though the Taxation and Revenue Department noted in its announcement that in some cases, one cannabis operator may hold multiple licenses for different facilities. The department said it is working with the Regulation and Licensing Department to confirm which licensees are operating, and both agencies may conduct in-person compliance checks.
As part of its commitment to help bring cannabis businesses into tax compliance, the Taxation and Revenue Department is offering managed audits, a voluntary program to help taxpayers resolve tax debts, and payment plans.
The department has distributed more than $47 million in cannabis excise tax revenue to the state’s general fund and to local governments as of September 2023.
