Real Estate Tax Services
Real estate tax services for investment trusts (REITs), private equity funds, and other real estate owners and operators involve sourcing and qualifying investments, structuring funds, and effectively developing and operating properties. From attracting initial capital to facilitating a successful exit, virtually every real estate-related decision and transaction has tax implications. To identify issues and deal breakers early on, real estate investors require in-depth due diligence from a tax perspective.
Retail Sales Tax Structure
Retail Sales Tax Structure: Sales to end users are subject to all state and local retailers’ occupation taxes. The state tax rate is 6.25% of the selling price, while local tax rates vary by location.
Cannabis Tax Services
Cannabis Purchaser Excise Tax: Must be electronically reported to the IDOR under requirements that mirror those for cultivators. Pre-payments are required on the 7th, 15th, 20th, and the last day of the month and cannot be less than 22.5% of actual month sales or 26.25% of the same month prior year. Bundling of cannabis sales with non-cannabis products is prohibited.
Country Cannabis Retailers’ Occupation Tax: Two new local retailers’ occupation taxes are imposed on sales to end users:
Cannabis County Retailers’ Occupation Tax: Collected and enforced by IDOR. The tax can be imposed in .25 percent increments. The maximum tax rate depends on the seller’s location:
Unincorporated county areas: Maximum rate of 3.75%
Municipality in a home rule county (e.g., Cook County): Maximum rate of 3%
Municipality in a non-home rule county: Maximum rate of .75 percent
Municipal Cannabis Retailers’ Occupation Tax: Municipal taxes can be imposed in .25 percent increments up to 3 percent of gross receipts.
Cannabis Purchases Excise Tax: This tax is imposed and collected by cannabis retailers on sales to end users. The tax rate varies by the type of product and THC content:
Flower below 35% THC — 10% Excise Tax
Edibles — 20% Excise Tax
Concentrates above 35% THC — 25% Excise Tax The Cannabis Purchaser Excise Tax must be stated separately on customers’ bills.
Financial Reporting
For Dispensing Organizations ONLY: The dispensing organization must file an annual compilation report with the Department, including a financial statement that shall include, but is not limited to, an income statement, balance sheet, profit and loss statement, statement of cash flow, wholesale cost and sales, and any other documentation requested by the Department in writing.
Cannabis Cultivation Privilege Excise Tax
A tax of 7 percent is imposed on gross receipts of cannabis sales by cultivators and craft growers. Licensure by the state is required to be eligible to register with the IDOR. The IDOR may set the selling price if it determines that a transaction is not an arm’s length sale.
Cultivation Excise Tax: Cultivators may recover the tax by stating it as a separate charge on the bill to their customers. The right of reimbursement is a recognition that the tax is the responsibility of the purchaser, and it cannot be collected from a purchaser if not paid by the cultivator. The tax is like locally-imposed retailers’ occupation taxes, placing the tax burden on the seller with a right of reimbursement from the purchaser. A purchaser with enough bargaining power could actually decline to reimburse cultivators for the tax.
Other Licenses Tax: The next tier of the tax process applies to companies that infuse cannabis into other products, like edibles. “Infusers” may be required by the IDOR to file information returns. Infusers are not subject to taxation, as they are buying cannabis for processing and resale. The requirement of information returns is a mechanism by which the IDOR can ensure that cannabis raised by cultivators and craft growers is not diverted to the black market.
Contact Us for Accounting Services in Chicago
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