Hemp-derived Cannabinoid or Kratom (HKT) Tax Frequently Asked Questions

What products are subject to the HKT tax?

Products that contain “hemp-derived cannabinoid” or kratom as an ingredient may be subject to the HKT tax as follows:

Kratom:

Kratom is defined as a psychoactive preparation that is composed of the crushed or powdered dried leaves of the mitragyna speciosa, a yellow-flowered tropical tree which contains the alkaloids mitragynine and 7-hydroxymitragynine. Products containing any part of the leaf of the mitragyna speciosa plant are subject to tax.

Kratom products subject to tax are products marketed for human consumption and include, but are not limited to, food, food ingredients, dietary supplements or beverages, as well as other products, such as lotions, ointments, shampoos, or any other type of product for personal use.

Hemp-derived cannabinoids:

Not all cannabinoids are subject to the HKT tax. The statute defines “hemp-derived cannabinoids,” which are subject to the HKT tax, as: Delta-9 tetrahydrocannabinol with a concentration of not more than 0.3 percent on a dry weight basis, Delta-8 tetrahydrocannabinol, Delta-10 tetrahydrocannabinol, hexahydrocannabinol, tetrahydrocannabiphorol, and tetrahydrocannabivarin. This would include cannabinoid products with Delta 8, Delta 9, Delta 10, HHC, THCp, and THCv.

Any product containing Delta 8, Delta 9, Delta 10, HHC, THCp, and THCv is subject to the HKT tax. Products may include food, food ingredients, dietary supplements or beverages, as well as other products, such as lotions, ointments, shampoos, or any other type of product for personal use.

I want to start a business selling hemp-derived cannabinoids or kratom products. What do I need to do?

All businesses must first apply for a business registration certificate with the Tax Division before beginning business in West Virginia. Click here to establish a new West Virginia business or to bring your out-of-state company to the Mountain State. This WV One Stop Business Portal allows you to register with the Secretary of State, Tax Division, and WorkForce in one convenient location. For more information on registering your business with the West Virginia Tax Division, please see TSD 360.

Next, you must submit an application for a hemp-derived cannabinoid or kratom products (HKT) permit with the Department of Agriculture. An application for an HKT permit can be found at the Department of Agriculture here. A Letter of Good Standing from the West Virginia Tax Division to the Department of Agriculture must be submitted along with the application for the HKT permit. A Letter of Good Standing request form and instructions on submission can be found at the Tax Division here.

I already have a West Virginia business registration certificate and want to sell hemp-derived cannabinoids or kratom products. Do I need to submit a new, or updated, business application?

No. You do not need to submit a new business application with the WV Tax Division or update your business registration certificate. However, you must submit your application with the Department of Agriculture, along with a Letter of Good Standing from the WV Tax Division to the Department of Agriculture. An application for an HKT permit can be found at the Department of Agriculture here, while a Letter of Good Standing request form and instructions on submission can be found at the Tax Division here.

Since I do not need to re-register or update my business registration certificate, how do I get an account to file the hemp-derived cannabinoid or kratom product tax?

All businesses must apply for a license through the Department of Agriculture. If you are a new business, the Department of Agriculture will notify the Tax Division that you are licensed and should have a HKT account setup so that you can file and pay through MyTaxes. The Tax Division will then set up the account. If you have an existing business license, you can request a new HKT account to be added via your MyTaxes account.

I have multiple locations. Do I need a Business Registration Certificate for each location?

A separate Business Registration Certificate is required for each fixed business location from which property or services are offered for sale or lease. It is also required where customer accounts may be opened, closed, or serviced. The Business Registration Certificate for each location is permanent until the business is relocated, closed or until the certificate is suspended, revoked, or canceled by the Tax Commissioner.

How do I get a Letter of Good Standing?

Please go to our MyTaxes website, then click the link ”Request Letter of Good Standing” in the “Other Individual Services” or “Other Business Services” area. Complete the form using your Business Registration information and click submit.

How much is the hemp-derived cannabinoid or kratom product tax?

The tax on Hemp derived products is 11% of the retail sales price and is In addition to all other applicable taxes.

The tax on Kratom products is 11% of the retail sales price.

*This tax shall not be added by the retailer as a separate charge or line item on any sales slip, invoice, receipt, other statement, or memorandum of the price paid by a customer. It may be included in the markup price of the product.

In addition to the HKT tax, these products may be subject to state and local sales tax, the tax on e-cigarette liquids, or other taxes depending on the product.

How do I file and pay the hemp-derived cannabinoid or kratom product tax?

This tax is required to be filed and paid electronically through the Tax Division’s online portal. If you are not currently registered for MyTaxes, you may register now by visiting our MyTaxes website, and then selecting the Sign Up link. HKT Hemp Derived Cannabinoids and Kratom Tax Instructions

  • To register with MyTaxes as a Business, you will need to provide:
  • Your Identification Number (i.e. SSN, ITIN, FEIN)
  • Zip Code
  • Account Number (i.e. account number associated with a specific tax type, such as your 8-digit account number for your Business Registration account.)
  • Account Type

You will then be allowed to upload documentation, ask questions on the status of your account, or make and schedule payments. If you have any questions on registration or need assistance, please contact Taxpayer Services at (304) 558-3333 or toll-free at (800) 982-8297.

How often and when will I file and pay the tax on hemp-derived cannabinoid or kratom products?

The tax will be reported and paid on a quarterly basis as follows: On the 20th day of January, April, July, and October for the preceding calendar quarter. For example, you must pay by April 20th for the January 1st-March 31st quarter. Please note: When filing the first tax return, you will include June retail sales in with the July - September retail sales.

Some of my products contain both hemp-derived cannabinoid products and kratom. Do I report these separately?

No. All products containing a hemp-derived cannabinoid will be reported as a hemp derived product, even if the product also contains kratom. Products containing kratom, but without hemp-derived cannabinoids that are subject to tax, will be reported as kratom.

Who should I contact at WV Tax Division if I have additional questions or need assistance?

  • For more information you can:
  • Call a Taxpayer Services Representative at (304) 558-3333 or toll-free at (800) 982-8297
  • Email TaxHelp@WV.Gov
  • Go Online to Tax.WV.Gov
​