Taxes: US dispensaries: Reporting your income for tax purposes

Practitioners

This article is intended for those who are not eligible for Form 1099-K. To see if you qualify for a 1099-K, please see US Businesses: Reporting your income with form 1099-K.

 

In this article: 

Accessing your financial reports
Account activity and balance report summary
Calculating net sales, Cost of goods, and Net income
Sales tax
Frequently Asked Questions 

 

Note: Our Customer Success team is available to answer any questions surrounding available reports, but are unable to provide extensive tax advice. Questions relating to how your taxes should be filed should be directed to a tax professional.

 

Accessing your financial reports

To assist in your financial record keeping, reports can be viewed and exported from your account. These reports, available after your first successful payout, record payout history, sales activity, and are used to calculate net income earned through your account.

To access these reports, select Reports from the practitioner menu. 

Accessing practitioner Reports within your account.

 

Account activity and balance report summary

The Account activity and balance report lists transactions within the selected time period, breaking down information such as net sales, cost of sales, and your net income.

A summary of values required for tax purposes can be accessed quickly from the Account activity and balance report by selecting the desired reporting year from the drop-down menu shown below. These values can be used confidently to fulfill your tax requirements.

Account activity and balance report summary for the 2019 tax year. 

Note: This report was updated in 2020 to improve accuracy and general navigation resulting in two versions of this report: historical and current (2020 and later). We did not overwrite previous years to avoid potential discrepancies in customer records. Learn more!

  

Calculating net sales, cost of goods, and net income

Net sales, Cost of Sales, and Net Income are calculated and displayed in the account activity and balance report summary after selecting a tax year (see example above).

The steps and example below will walk you through how to export this report and understand how those figures are calculated.

 

Step 1: Downloading the Account activity and balance report.

To download the account activity and balance report:

1. Select your name or avatar to open the practitioner menu, then click Reports. On mobile devices, select  , followed by your name or avatar, then tap Reports.
2. Scroll to the Account Activity and Balance Report heading.
3. Select a year.
4. Click Excel to download a formatted .xslx file to your device. Or, select CSV for an unformatted comma-separated values file.

 In our example below, we will be looking into the 2019 tax year.

Account activity and balance report summary for the 2019 tax year.

 

The excel export will resemble the example below. 

Sample Excel (.xlsx) export of the Account activity and balance report.

 

Column definitions

Column	Definition
transaction_number	The shipment ID.
transaction_type	Type of record displayed. i.e. payout, refund, or shipment.
transaction_status	The record's status. i.e. amounts paid (payouts), shipped (orders), or received (refunds).
order_number	Fullscript order number.
transaction_date	The date the shipment was shipped, the refund was received, or the payout was deposited.
msrp_total	Total MSRP (manufacturer suggested retail price) in the shipment.
sales_total	Represents the total retail cost and is calculated as the MSRP total less the patient discount.
patient_discount	The discount amount ($) applied to the order, or patient savings.
cogs_total	The fee earned by Fullscript representing product cost and fees associated with administering the transaction. Referred to as cost of sales or cost of goods sold (COGS).
total	Represents net earnings from the transaction, and is calculated as sales total less COGS total. Note: This column is labeled 'amount' in a previous version of this report (years 2019 and earlier).
balance	Running balance of funds available for payout.

 

Step 2: Calculating net sales

Net sales represent the total retail value of orders transacted. For this, we sum up the values in the sales_total column. In this example, we see a total of $46,088.68.

 

Step 3: Calculating cost of sales

Cost of Sales represents the costs incurred to complete the sale. For this, we sum up the values in the cogs_total column. In this example, we see a total of $36,451.69.

 

Step 4: Calculating net income

Net Income represents the total of the earnings payable to your business by Fullscript in the form of payouts. To calculate net income for the year, we deduct the Cost of Sales (Column D) from Net Sales (Column B). In this example, we find a Net Income of $9,636.99.

An example of the Account activity and balance report with Net Sales, Cost of Sales, and Net Income calculated.

 

Step 5: Report these values as needed to complete your tax obligations.

Our Customer Success team members are unable to provide tax advice or guidance. Please contact an accountant or tax professional if you are uncertain of your tax obligations.

 

Sales tax

Fullscript collects and remits applicable sales tax to the state for you, so you have one less thing to worry about.

Note: Fullscript is committed to collecting and remitting sales tax at the state level, but we don’t currently collect or remit sales tax for home rule jurisdictions with self-administered local taxing authorities (cities, counties, or special tax jurisdictions) that have chosen to collect and administer sales or use tax independently from the state. 

 

Frequently Asked Questions

What do I need to share with my tax professional to complete my taxes?

✔ Account Activity & Balance Report (for applicable tax year)

 

Why didn't I receive a 1099-K?

Only dispensaries that have satisfied their state's eligibility thresholds will be issued a 1099-K. We refer to the financial address on your account to determine eligibility.