HomeMy WebLinkAbout6/15/2011 - STAFF REPORTS - 5.A. �A11.
cPox:.rco a'°
c ►FORN�P CITY COUNCIL STAFF REPORT
<.80
DATE: June 1; 2011 (or\� , New Business 5A
DISCUSSION ON THE LOCAL TAXATION OF MEDICAL CANNABIS
COOPERATIVES AND COLLECTIVES
FROM: David H. Ready, City Manager
BY: Douglas Holland, City Attorney
Attached for your reference is a chart that shows how other local jurisdictions in the
state have imposed taxes on marijuana businesses. The tax rates are typically treated
as "business taxes" or "license taxes" and are assessed as a percentage of gross
receipts. Each program has been approved by the voters as a new tax, consistent with
the provis. ns of Proposition 218.
Dougl s Holland, City Attorney
ITEk' NO.
i
City Section Approach Rates
San Jose 4.66 Business tax on marijuana "business Tax rate not to exceed 10"'.
NN hich is defined as business activity Currently set at 71 o of gross
regardless of profit (so it applies to receipts. 4.66.250
nonprofits as«ell).
Monthly paN ment required.
Tax does not distinguish bet«een
medical and non-medical use.
Berkelev 9.04.136 Annual business tar on medical and Currently at 2.5% ($25 per $1000)
non-medical marijuana businesses. of gross receipts. 9.04.136(A)(2).
Exempts registered non-profit
organizations.
Long 3.80.260 Annual business tax on medical and 15% ($150 per $1000) of gross
Beach non-medical marijuana businesses and receipts for businesses.
suppliers of marijuana. 3.80.260(B)(1).
Exempts registered non-profit or
religious organizations from all taxes $25.00 per square foot on all
except for 3.80.260(B)(3). improvements owned, rented, lease
or occupied or used by a for-profit
cultiN•ation facility or growth site.
3.80.260(B)(2).
$10 per square foot similar to the
above, if culti-vation facility or
growth site is a non-profit.
3.80.260(B)(3).
The minimum tax is $1000
annually. 3.80.260(B)(4).
Los 21.50 Requires a business permit for all 5% ($50 of $1000 or fraction of
Angeles medical marijuana collecti-vcs. $1000)of gross receipts. 21.50(b).
Rancho 3.80 Annual business tax for those operating 12% ($120 per $1000) if gross
CordoN,a a marijuana business. receipts are 1 mullion or less.
3.80.040(A).
Rate is a sliding scale depending on
amount of gross receipts and whether 15% ($150 per $1000) rate applies
organization is for profit or non-profit. if to the amount exceeding 1 million
3.80.040. dollars. 3.80.040(B).
No exemption for non-profits. Nonprofits must pay $100 per
square foot on all business
improti ements. 3.80.040(C).
3.95 Requires registration of cannabis Indoor Cultixation— if less than 25
cultivators and payment of an annual tax square feet, $600 sq feet. if more
based on square footage. than 25 sq ft, then S900 sq feet.
3.85(A)(1).
No exemption for non-profits.
Outdoor Cultivation - if less than
25 square feet, $600 12.5 sq feet.
if inorc than 25 sq ft, then
$900 12.5 sq feet. 3.85(A)(2).
Richmond 7.04.139 Requires any person engaged in I W'(')($100 for each$1000)
business to pay an annual license tax,
payable in advance in the beginning of
the year.
No exemption for non-profits.
Sacramento 3.08.205 Requires any person engaged in 4"-;,of each dollar of gross receipts.
business to pay an annual license tax.
No exemption for non-profits.
Stockton 5.98 Requires any person engaged in 2.5% ($25 for each $1000)
business to pay an annual license tax. 5.98.030(a).
No exemption for non-profits.
3