How to Easily Report Arizona Cannabis Excise Taxes with Treez
This article will walk you through some basic information about excise tax requirements for Arizona dispensaries and how to easily fill out your MET-1 Return with Treez.
What is an excise tax?
An excise tax is designed to generate extra revenue for regulating governing bodies and applies to various goods or services. Historically, excise taxes have been imposed on goods or services that legislators have deemed to negatively impact society, like fossil fuels, commercial trucking operations, indoor tanning, alcohol, gambling, and tobacco.
The rules for collecting excise taxes depend on local regulations and the type of good or service sold. When it comes to the cannabis industry, it is no different. Excise tax is generally collected in two ways. Ad Valorem excise taxes are calculated as a percentage of the total sale price of a good or service, whereas specific excise taxes are calculated on a per-unit basis. Most states that sell recreational or medical cannabis use the ad valorem method to collect excise taxes. However, Alaska, California, and Maine levy a specific tax based on the weight of cannabis, and one state, Illinois, calculates excise tax based on the potency of the product sold.
Excise tax can also be collected at different points in the supply chain. For example, the excise tax is collected and submitted by growers and/or processors for those states that enforce a weight-based excise tax. However, for states that use the ad valorem method, the excise tax is charged as a percentage of a total purchase price to the end consumer. Currently, Arizona requires an ad valorem excise tax at a rate of 16% charged at the point of sale.
What is the Marijuana Excise Tax Return (MET-1)?
Arizona now requires dispensaries to submit a Marijuana Excise Tax Return by the 20th of each month for the previous month's sales. This form reports the total excise tax paid on adult-use / recreational marijuana sales and reports all medical and adult-use cannabis inventory changes. You can download the MET-1 form and instructions on using it here.
What is the MET-1 Report Dashboard in Treez, and why use it?
To help your dispensary team with the arduous task of calculating excise taxes for all of your sales in one given month, Treez has developed a report to provide you with all the numbers you need in one easy place.
The Arizona MET-1 Consolidated Categories table of the dashboard looks exactly like the second page of the MET-1 (Inventory Schedule Section II). The dashboard aggregates all of your store’s data so that product types are rolled up into the 3 categories that the Inventory Schedule (Section II) table requires in the Marijuana Excise Tax Return form.
The MET-1 Report dashboard has saved the average Arizona cannabis retailer an average of 8 hours of reporting work every month.
To access the AZ MET Report Dashboard, follow these instructions in our help center then follow the steps below to fill out your Excise Tax Return.
How to fill out your Arizona Marijuana Excise Tax Return (MET-1) with Treez
Find more detailed instructions in our Help Center.
Step 1: Filter for the store, month, and year that you are pulling data for. This is crucial so that the information you export aligns with what is needed for your Marijuana Excise Tax Return.
Step 2: Export the data from the AZ MET Consolidated Categories table.
Step 3: Copy all columns from H to R and paste them into the Inventory Schedule (Section 2) table. All columns from the dashboards that are exported to the left of column H are for your own information.
Step 4: Populate the TPT location code column in the Inventory Schedule (Section 2).
Treez is here to help
We developed the MET-1 Report Dashboard to save your dispensary operations time and effort in reporting to the Arizona Department of Revenue. If you'd like to see this dashboard in action, please request a demo or email contact@treez.io.
If you're a current customer and need help using the MET-1 Report Dashboard, chat with us in-app or reach out to support@treez.io.