Cannabis Infused Beverages (CIB) FAQs

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Effective July 1, 2025, House Bill 775 imposes a $1.92 per gallon excise tax on the use, sale, or distribution by sale or gift of CIB (KRS 243.720) and a 11% wholesale sales tax on wholesale sales of CIB made by distributors, direct shipper licensees shipping to a Kentucky consumer, and all manufacturers of CIB permitted by the Department for Public Health (KRS 243.884).

New statutory language is provided in Kentucky Revised Statutes - Chapter 243.

Who is responsible for reporting and paying the $1.92 per gallon excise tax on CIB?

The manufacturer is responsible for reporting and paying the excise tax on all direct-to-consumer (DTC) sales to Kentucky customers and self-distribution sales to Kentucky retailers. The Kentucky distributor is responsible for reporting and paying the excise tax on all sales to Kentucky retailers.

Who is responsible for reporting and paying the 11% wholesale sales tax on CIB?

The tax liability is dependent upon who is receiving the CIB.

If a manufacturer issending finished product to a registered Kentucky distributor, then the distributor is required to report and pay the wholesale sales tax.
If the manufacturer is selling directly to a Kentucky retailer (self-distribution), then the manufacturer is required to report and pay the wholesale sales tax.
If the manufacturer is making sales direct to Kentucky consumers (DTC), then the manufacturer is required to report and pay the wholesale sales tax.

How do I register and get a CIB permit?

More than one registration may be required. All manufacturers and distributors will be required to register with the Kentucky Department of Revenue (DOR) using the Cannabis Infused Beverage Registration Form. Please register with the following agencies below before completing the DOR Registration Form.

Kentucky Department for Public Health permits and registers CIB products at https://redcap.chfs.ky.gov/surveys/?s=Y39LYTYADX3YNHFD.
Kentucky Department of Alcoholic Beverage Control (ABC) licenses manufacturers shipping DTC and distributors. Licenses will be available in the future through the ABC licensing portal at https://abcportal.ky.gov/BelleExternal/.

When are CIB tax forms and payments due?

The CIB tax reports for manufacturers and distributors will be due monthly on the 20th of the following month. The manufacturers quarterly report for DTC and self-distribution will be due the 20th of the month following the end of the quarter. The CIB taxes are effective July 1, 2025 and the first reporting period will be due on or before August 20, 2025.

What CIB tax form(s) am I required to file?

Upon registration with the DOR manufacturers and distributors of CIB will be notified of required tax forms and obligations. In the meantime, additional information on the taxation of CIB can be found at https://revenue.ky.gov/Business/Alcohol-Taxes/Pages/default.aspx.