The Taxnexus tax engine works with three inputs:
- Geographic Location
- Regulatory Sales Type
- Taxnexus Code
We get the location and sales type (medicinal or recreational) from the transaction document (invoice, quote, order, PO). These are specified with the
salesregulation fields in the document header.
For each item in a transaction document a Taxnexus Code must be specified in the
taxnexuscode field in the line item. See this Google Document for a spreadsheet with all the Taxnexus Codes with descriptions.
How Do I Manage Taxnexus Codes?
Taxnexus Codes are best used by integrating them directly into product catalogs using the mnemonic codes. Taxnexus Codes may be up to 80 characters in length. A numeric mapping is provided in case you wish to store an integer representation of the code to optimize storage.
How Are Taxnexus Codes Assigned?
A product is only assigned a Taxnexus Code if it is subject to taxation. Items such as services and food items are exempt from taxes in most states. When an item is passed to Taxnexus without a Taxnexus Code, no tax calculations will be made.
consume Taxnexus Code on products that are subject to standard consumption tax, usually known as State Sales Tax.
Besides general consumption, most catalogs have cannabis products that are either bought or sold by an establishment. The two major classes of Taxnexus Codes used to designate cannabis products in those two parts of the product chain are
State-by-State Product Catalogs
Cannabis consumption and cultivation tax regimens vary by state. Most states have a variety of taxes or reporting requirements that require Taxnexus Codes to vary on a state-by-state basis.
If you wish to maintain a unified product catalog across different states then in most cases you must maintain a list of Taxnexus codes that applies to each product on a state-by-state basis.
To simplify the use of Taxnexus codes, you may supply a shortened code, like
cannaconsume, in a state like California with only one excise tax on cannabis consumption. Using a simplified
cannacultivation code also works in a state like Nevada that has only one cultivation excise tax.
In Oregon, however, the State taxing authority has a reporting requirement that calls for products to be broken down into designated categories. That is why in Oregon we require extended Taxnexus codes like
Likewise, in California the CDTFA has different cultivation tax rates based on the type of product. When a California distributor records a purchase from a cultivator they need to designate the type item on the purchase order with an extended Taxnexus Code like
Listing of Taxnexus Codes
A more manageable version of this list is maintained here.
|218||cannaconsume-federal-can-excise||Canadian Cannabis Stamp Tax|
|5||cannaconsume-state-ca-excise||California Cannabis Consumption Excise Tax|
|230||cannaconsume-state-nv-excise||Nevada Cannabis Consumption Excise Tax|
|223||cannaconsume-state-or-concentrates||Oregon Marijuana Sales Tax|
|224||cannaconsume-state-or-edibles||Oregon Marijuana Sales Tax|
|225||cannaconsume-state-or-flower||Oregon Marijuana Sales Tax|
|226||cannaconsume-state-or-immature_plants||Oregon Marijuana Sales Tax|
|227||cannaconsume-state-or-leaves||Oregon Marijuana Sales Tax|
|229||cannaconsume-state-or-other||Oregon Marijuana Sales Tax|
|228||cannaconsume-state-or-skin_hair_products||Oregon Marijuana Sales Tax|
|231||cannaconsume-state-wa-excise||Washington Cannabis Consumption Excise Tax|
|13||cannacultivation-state-ca-flowers||California Cannabis Cultivation Tax, Flowers Only|
|14||cannacultivation-state-ca-fresh||California Cannabis Cultivation Tax, Fresh Weight|
|15||cannacultivation-state-ca-leaves||California Cannabis Cultivation Tax, Leaves Only|
|12||cannacultivation-state-co-excise||California Cannabis Cultivation Excise Tax|
|38||consume-province||Provincial Sales Tax (PST)|
|40||consume-state||State Sales Tax|