HomeMy WebLinkAbout23476 RESOLUTION NO. 23476
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, ESTABLISHING (1) A TEN
CENT PER ONE DOLLAR TAX ON MEDICAL CANNABIS
COLLECTIVES OR COOPERATIVES APPROVED BY THE
CITY COUNCIL AND (2) AUDIT REQUIREMENTS TO
ENSURE TIMELY AND FULL COMPLIANCE WITH THE
CITY'S CANNABIS AND MARIJUANA TAX ORDINANCE.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS FINDS:
A. The voters of the City of Palm Springs approved Measure B at the
November 5, 2013 general municipal election.
B. Measure B is an ordinance that added Chapter 3.35 to the Palm Springs
Municipal Code (the "Ordinance"). The Ordinance, authorizes the City to impose a tax
on the proceeds of cannabis and marijuana collectives as defined in the Ordinance in a
maximum amount of 15 cents of every dollar of proceeds.
C. The Ordinance provides the Council with the authority to set the tax at a
rate that is less than 15 cents on the dollar and to establish exemptions, incentives, or
other reductions, and penalties and interest charges or assessments for failure to pay
the tax in a timely manner.
D. This Resolution will set at tax rate of 10 cents on the dollar for each
medical cannabis collective or cooperative that received or receives from the City
Council a permit to operate as a medical cannabis collective or cooperative pursuant to
Section 93.23.15, as may be amended from time to time. The City Council further
affirms and establishes a tax rate of 15 cents on the dollar for each marijuana
dispensary, collective, or cooperative operating the City without a lawful permit issued
by the City Council pursuant to Palm Springs Municipal Code Section 93.23.15, as
amended.
E. This Resolution also establishes appropriate penalties and interest
charges for payment delinquencies and appropriate audit and financial review
requirements to ensure timely and full payment of all taxes required under the
Ordinance and this Resolution.
F. The definitions contained in the Ordinance shall pertain to words or terms
used in this Resolution. For the purpose of this Resolution the term "Director" means
the City Manager or the City Manager's designee; "Tax" means the Cannabis and
Marijuana Tax" as established in the Ordinance and as administered under this
Resolution.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS RESOLVES:
Resolution No. 23476
Page 2
SECTION 1. The Tax on a medical cannabis collective or cooperative for which
the City has issued a permit pursuant to Palm Springs Municipal Code Section 93.23.15
as amended shall be 10 cents for each dollar (or portion thereof) of the proceeds of
such collective or cooperative.
SECTION 2. The Tax on each marijuana collective operating in the City and
which has not been issued a permit pursuant to Palm Springs Municipal Code Section
93.23.15 as amended shall be 15 cents for each dollar (or portion thereof) of the
proceeds of such collective or cooperative.
SECTION 3. The Tax shall be due and payable as follows:
A. Each person owing Tax, on or before the last day of each calendar month,
shall prepare a tax return to the Director of the total proceeds and the amount of Tax
owed for the preceding calendar month. At the time the Tax return is filed, the full
amount of the Tax owed for the preceding calendar month shall be remitted to the
Director.
B. All tax returns shall be completed on forms provided by the Director.
C. Tax returns and payments for all outstanding taxes owed the City are
immediately due the Director upon cessation of business for any reason.
SECTION 4. Whenever any payment, statement, report, request or other
communication received by the Director is received after the time prescribed by this
Resolution for the receipt thereof, but is in an envelope bearing a postmark showing that
it was mailed on or prior to the date prescribed in this Resolution for the receipt thereof,
or whenever the Director is furnished substantial proof that the payment, statement,
report, request, or other communication was in fact deposited in the United States mail
on or prior to the date prescribed for receipt thereof, the Director may regard such
payment, statement, report, request, or other communication as having been timely
received. If the due day falls on Friday, Saturday, Sunday, or a holiday, the due day
shall be the next regular business day on which the City hall is open to the public.
SECTION 5. Unless otherwise specifically provided under other provisions of
this Resolution, the taxes required to be paid pursuant to this Resolution shall be
deemed delinquent if not paid on or before the due date specified in Section 3 of this
Resolution.
SECTION 6. The Director is not required to send a delinquency or other notice
or bill to any person subject to the provisions of this Resolution and failure to send such
notice or bill shall not affect the validity of any tax or penalty due under the provisions of
this Resolution.
SECTION 7.
A. Any person who fails or refuses to pay any tax required to be paid pursuant
to this Resolution on or before the due date shall pay penalties and interest as follows:
1. A penalty equal to twenty-five percent of the amount of the Tax in addition
to the amount of the Tax, plus interest on the unpaid Tax calculated from the due date
of the Tax at a rate established by resolution of the City Council; and
Resolution No. 23476
Page 3
2. An additional penalty equal to twenty-five percent of the amount of the
Tax if the tax remains unpaid for a period exceeding one calendar month beyond the
due date, plus interest on the unpaid Tax and interest on the unpaid penalties
calculated at the rate established by resolution of the City Council.
B. Whenever a check is submitted in payment of a Tax and the check is
subsequently returned unpaid by the bank upon which the check is drawn, and the
check is not redeemed prior to the due date, the taxpayer will be liable for the Tax
amount due plus penalties and interest as provided for in this section plus any amount
allowed understate law.
C. The Tax due shall be that amount due and payable from January 1, 2014
or the first date on which the collective first operated in the City, whichever date
occurred last, together with applicable penalties and interest calculated in accordance
with Subsection A of this Section.
SECTION 8. The Director may waive the first and second penalties of twenty-
five percent each imposed upon any person if:
A. The person provides evidence satisfactory to the Director that failure to pay
timely was due to circumstances beyond the control of the person and occurred
notwithstanding the exercise of ordinary care and the absence of willful neglect, and the
person paid the delinquent business tax and accrued interest owed the City prior to
applying to the Director for a waiver.
B. The waiver provisions specified in this subsection shall not apply to interest
accrued on the delinquent tax and a waiver shall be granted only once during any
twenty-four month period.
SECTION 9.
A. No refund shall be made of any tax collected pursuant to this Resolution,
except as provided in Section 10 of this Resolution.
B. No refund of any Tax collected pursuant to this Resolution shall be made
because of the discontinuation, dissolution, or other termination of a collective.
C. Any person entitled to a refund of taxes paid pursuant to this Resolution
may elect in writing to have such refund applied as a credit against collective's Taxes
for the next calendar month.
SECTION 10.
A. Whenever the amount of any tax, penalty, or interest has been overpaid,
paid more than once, or has been erroneously or illegally collected or received by the
City under this Resolution, it may be refunded to the claimant who paid the Tax
provided that a written claim for refund is filed with the Director.
B. The Director shall have the right to examine and audit all the books and
business records of the claimant in order to determine the eligibility of the claimant to
the claimed refund. No claim for refund shall be allowed if the claimant therefor refuses
to allow such examination of claimant's books and business records after request by the
Director to do so.
C. In the event that the Tax was erroneously paid and the error is attributable
to the City, the entire amount of the Tax erroneously paid shall be refunded to the
Resolution No. 23476
Page 4
claimant. If the error is attributable to the claimant, the City shall retain the amount set
forth in this Resolution from the amount to be refunded to cover expenses.
D. The Director shall initiate a refund of any Tax which has been overpaid or
erroneously collected whenever the overpayment or erroneous collection is uncovered
by a City audit of Tax receipts. In the event that the Tax was erroneously paid and the
error is attributable to the City, the entire amount of the Tax erroneously paid shall be
refunded to the claimant. If the error is attributable to the claimant, the City shall retain
the amount set forth in this Resolution from the amount to be refunded to cover
expenses.
SECTION 11.
A. It shall be the duty of the Director to enforce each and all of the provisions
of this Resolution.
B. For purposes of administration and enforcement of this Resolution
generally, the Director, with the concurrence of the City Attorney, may from time to time
promulgate administrative rules and regulations.
SECTION 12. The Director shall have the power to audit and examine all books
and records of collectives as well as persons engaged in the operation of a cannabis or
marijuana collective including both state and federal income tax returns, California sales
tax returns, or other evidence documenting the gross receipts of collectives or persons
engaged in the operation of a cannabis or marijuana collective, for the purpose of
ascertaining the amount of Tax, if any, required to be paid by the provisions of this
Resolution or the Ordinance, and for the purpose of verifying any statements or any
item thereof when filed by any person pursuant to the provisions of this Resolution. If
such collective or person, after written demand by the Director, refuses to make
available for audit, examination or verification such books, records, or equipment as the
Director requests, the Director may, after full consideration of all information within the
Director's knowledge concerning the collective and its business and activities of the
person so refusing, make an assessment in the manner provided in Sections 13 and 14
of this Resolution.
SECTION 13. The amount of any tax, penalties, and interest imposed by the
provisions of this Resolution shall be deemed a debt to the City and any person
operating a collective without first having procured a business tax license as provided in
Chapter 3.52 of the Palm Springs Municipal Code shall be liable in an action in the
name of the City in any court of competent jurisdiction for the amount of the tax, and
penalties and interest imposed on such collective.
SECTION 14. If the Director is not satisfied that any statement filed as required
under the provisions of this Resolution is correct, or that the amount of tax is correctly
computed, he or she may compute and determine the amount to be paid and make a
deficiency determination upon the basis of the facts contained in the statement or upon
the basis of any information in his or her possession or that may come into his or her
possession. One or more deficiency determinations of the amount of tax due for a
period or periods may be made. When a person discontinues engaging in a business, a
deficiency determination may be made at any time within three years thereafter as to
Resolution No. 23476
Page 5
any liability arising from engaging in such business whether or not a deficiency
determination is issued prior to the date the tax would otherwise be due. Whenever a
deficiency determination is made, a notice shall be given to the person concerned in the
same manner as notices of assessment are given under Sections 15 through 17 of this
Resolution.
SECTION 15.
A. Under any of the following circumstances, the Director may make and give
notice of an assessment of the amount of tax owed by a person under this Resolution:
1. If the person has not filed any statement or return required under the
provisions of this Resolution;
2. If the person has not paid any tax due under the provisions of this
Resolution;
3. If the person has not, after demand by the Director, filed a corrected
statement or return, or furnished to the Director adequate substantiation of the
information contained in a statement or return already filed, or paid any additional
amount of tax due under the provisions of this Resolution;
4. If the Director determines that the nonpayment of any business tax due
under this Resolution is due to fraud, a penalty of twenty-five percent of the amount of
the tax shall be added thereto in addition to penalties and interest otherwise stated in
this Resolution.
B. The notice of assessment shall separately set forth the amount of any tax
known by the Director to be due or estimated by the Director, after consideration of all
information within the Director's knowledge concerning the business and activities of the
person assessed, to be due under each applicable section of this Resolution, and shall
include the amount of any penalties or interest accrued on each amount to the date of
the notice of assessment.
SECTION 16. The notice of assessment shall be served upon the person either
by handing it to him or her personally, or by a deposit of the notice in the United States
mail, postage prepaid thereon, addressed to the person at the address of the location of
the business appearing on the face of the business tax certificate issued under
Resolution 4.76 or to such other address as he or she shall register with the Director for
the purpose of receiving notices provided under this Resolution; or, should the person
have no business tax certificate issued and should the person have no address
registered with the Director for such purpose, then to such person's last known address.
For the purposes of this section, a service by mail is complete at the time of deposit in
the United States mail.
SECTION 17. Within ten days after the date of service the person may apply in
writing to the Director for a hearing on the assessment. If application for a hearing
before the City is not made within the time herein prescribed, the tax assessed by the
Director shall become final and conclusive. Within thirty days of the receipt of any such
application for hearing, the Director shall cause the matter to be set for hearing before
him or her not later than thirty days after the date of application, unless a later date is
agreed to by the Director and the person requesting the hearing. Notice of such hearing
shall be given by the Director to the person requesting such hearing not later than five
Resolution No. 23476
Page 6
days prior to such hearing. At such hearing said applicant may appear and offer
evidence why the assessment as made by the Director should not be confirmed and
fixed as the tax due. After such hearing the Director shall determine and reassess the
proper tax to be charged and shall give written notice to the person in the manner
prescribed in Section 12 for giving notice of assessment.
SECTION 18. The conviction and punishment of any person for failure to pay the
required tax shall not excuse or exempt such person from any civil action for the tax
debt unpaid at the time of such conviction. No civil action shall prevent a criminal
prosecution for any violation of the provisions of this Resolution or of any state law
requiring the payment of all taxes.
SECTION 19. Any person violating any of the provisions of this Resolution or
any regulation or rule passed in accordance herewith or knowingly or intentionally
misrepresenting to any officer or employee of the City any material fact in procuring the
certificate or document from the City as provided for in the Ordinance or this Resolution
shall be deemed guilty of a misdemeanor.
SECTION 20. The operative date of this Resolution shall be January 1, 2014.
PASSED, APPROVED AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 18TH DAY OF DECEMBER, 2013.
DAVID H. READY, CI AGER
ATTEST:
AMES THOMPSON, CITY CLERK
Resolution No. 23476
Page 7
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. 23476 is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on December 18, 2013, by the
following vote:
AYES: Councilmember Foat, Councilmember Lewin, Mayor Pro Tern Hutcheson,
and Mayor Pougnet.
NOES: Councilmember Mills.
ABSENT: None.
ABSTAIN: None.
MES THOMPSON, CITY CLERK
City of Palm Springs, California011Zd1ze i�(
ORDINANCE NO. 1831
AN ORDINANCE OF THE PEOPLE OF THE CITY OF
PALM SPRINGS, CALIFORNIA, ADDING CHAPTER 3.35
TO THE PALM SPRINGS MUNICIPAL CODE, APPROVING
AND IMPLEMENTING A CANNABIS AND MARIJUANA
TAX OF UP TO 15 CENTS PER $1.00 OF PROCEEDS ON
CANNABIS OR MARIJUANA COLLECTIVES OPERATING
IN THE CITY.
THE PEOPLE OF THE CITY OF PALM SPRINGS ORDAINS:
SECTION 1. Chapter 3.35 is added to the Palm Springs Municipal Code to read:
CANNABIS AND MARIJUANA TAX
3.35.010 Imposition of Tax.
3.35.020 Definitions,
3.35.030 Payment Obligation.
3.35.040 City Council Authorization to Adjust Rates.
3.35.050 Payment of Tax Does Not Authorize Activity.
3.35.060 Cannabis and Marijuana Tax Is Not a Sales Tax.
3.35.070 Amendments and Administration.
3.35.010 Imposition of Tax.
Every person engaged in operating or otherwise conducting a cannabis or
marijuana collective, and regardless of whether such collective has a permit pursuant to
Section 9.23.15 of this Code, shall pay a cannabis and marijuana tax of 15 cents for
each $1.00 of proceeds or fractional part thereof.
3.35.020 Definitions
For purposes of this Chapter.
A. A "cannabis or marijuana collective" means any activity regulated or
permitted by Section 9.23.15 of this Code, or California Health and Safety Code
sections 11362.5, at seq., as may be amended from time to time, or any other activity or
business that involves planting, cultivating, harvesting, transporting, dispensing,
delivering, providing, manufacturing, compounding, converting, processing, preparing,
storing, packaging, or testing any part of the marijuana plant for medical purposes.
B. "Proceeds" means gross receipts of any kind, including without limitation,
membership dues; the value of in-kind contributions; reimbursements provided by
members regardless of form; any payments made; and anything else of value obtained
by a cannabis or marijuana collective.
Ordinance No. 1831
Page 2
3.35.030 Payment Obligation.
All taxpayers subject to this Chapter must pay the full tax imposed by this
Chapter regardless of any rebate, exemption, incentive, or other reduction set forth
elsewhere in this Code, except as required by California or Federal Law. Failure to pay
the tax shall be subject to penalties, interest charges, and assessments as the City
Council may establish and the City may use any or all other code enforcement remedies
provided in the Charter and this Code. No provision in this Code can lower the tax rate
set forth in this Section or otherwise reduce the amount of taxes paid hereunder unless
the provision specifically states that the reduction applies.
3.35.040. City Council Authorization to Adjust Rates,
The City Council may impose the tax authorized by this Chapter at a lower rate
and may establish exemptions, incentives, or other reductions, and penalties and
interest charges or assessments for failure to pay the tax in a timely manner, as
otherwise allowed by the Charter and California law. No action by the Council under this
Section shall prevent it from later increasing the tax or removing any exemption,
incentive, or reduction, and restoring the maximum tax specked in this Chapter.
3.35.050 Payment of Tax Does Not Authorize Activity.
The payment of the tax required pursuant to this Chapter shall not be construed
as authorizing the conduct or continuance of any illegal business or of a legal business
in an illegal manner. Nothing in this Chapter implies or authorizes that any activity
connected with the distribution or possession of cannabis is legal unless otherwise
authorized and allowed in strict and full conformance to the provisions of this Code,
including without limitation the provisions of Section 9.23.15. Nothing in this Chapter
shall be applied or construed as authorizing the sale of marijuana.
3.35.060 Cannabis and Marijuana Tax Is Not a Sales Tax.
The Cannabis and Marijuana Tax provided for under the provisions of this
Chapter is not a Sales or Use Tax and shall not be calculated or assessed as such.
The Cannabis and Marijuana Tax shall not be separately identified or otherwise
specifically assessed or charged to any member, patient, or caretaker.
3.35.070 Amendments and Administration.
A. This Chapter was submitted to the voters for approval. Any amendment to
Section 3.35.010 to increase the Tax above the rate expressly provided in such Section
shall not become effective until such amendment is approved by the voters. The voters
expressly authorize the City Council to amend, modify, change, or revise any other
provision of this Chapter as the City Council deems in the best interest of the City.
Ordinance No. 1831
Page 3
B. The City Manager or the City Manager's designee shall promulgate rules,
regulations, and procedures to implement and administer this
p Chapter to ensure the
efficient and
timely collection of the tax imposed by this Chapter, including without
limitation, formulation and implementation of penalties and interest to be assessed for
failure to pay the tax as provided.
C. The City Manager or the City Manager's designee shall annually audit the
cannabis and marijuana taxes imposed by this Chapter to verify that tax revenues have
been properly expended in accordance with the law.
D. Pursuant to California Constitution Article XIIIB, the appropriation limit for
the City is increased to the maximum extent over the maximum period of time allowed
under law consistent wit
h the revenues generated b g y the cannabis and marijuana tax.
SECTION 2. This Ordinance shall become effective upon adoption by a majority
of the voters casting votes at the general municipal election on November 5, 2013.
j PASSED, APPROVED, AND ADOPTED BY THE PEOPLE OF THE CITY OF
PALM SPRINGS AT THE REGULAR MUNICIPAL ELECTION HELD THE 5T" DAY OF
NOVEMBER, 2013.
.An,4 P. 40,z
ATTEST: STEPHEN P. POUGNET, MAYOR
ES THOMPSON, CITY CLERK
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, California, do
hereby certify that Ordinance No. 1831 is a full, true, and correct copy, and was adopted
by a majority vote of the People of the City of Palm Springs, at the Regular Municipal
Election held the 5'" day of November, 2013, as appears by the official returns of said
election, and the Statement of Votes Cast as declared by the City Council, Resolution
No. 23472, adopted the 20P day of November, 2013.
MES THOMPSON, CITY CLERK
City of Palm Springs, California I Z1051 ev)3