HomeMy WebLinkAbout6/1/2011 - STAFF REPORTS - 5F S v
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q�,FQR�' CITY COUNCIL STAFF REPORT
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DATE: June 1, 2011 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
City Section Approach Rates
San Jose 4.66 Business tax on mar%Juana "business", Tax rate not to exceed 10%.
which is defined as business activity Currently set at 7° of gross
regardless of profit (so it applies to receipts. 4.66?50
nonprofits as well).
Monthly payment required.
Tax does not distinguish between
medical and non-medical use.
Berkeley 9.04.136 Annual business tax on medical and Currently at 2.5°-0 ($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°o ($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
cultivation facility or growth site.
3.80.260(B)(2).
$10 per square foot similar to the
above, if cultivation 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 51,0 ($50 of $1000 or fraction of
Angeles medical marijuana collectives. $1000)of gross receipts. 21.50(b).
Rancho 3.80 Annual business tax for those operating 12°-0 1$120 per $1000) if gross
Cordova a marijuana business. receipts are 1 million or less.
3.80.040(A).
Rate is a sliding scale depending on
amount of gross receipts and whether 15°,0 ($150 per $1000) rate applies
organization is for profit or non-profit. if to the amount exceeding 1 million
3.80.040. dollars. 3.50.040(B).
No exemption for non-profits. Nonprofits must pay $100 per
square foot on all business
improvements. 3.80.040(C').
3.ti5 Requires registration of cannabis Indoor Cultivation — if less than 25
cultivators and payluent of an annual tax square feet, $600 sq feet. if more
based on square footage. than 25 sq ft. then $900-sq feet.
3.S5(A)(1).
No exemption for non-profits.
Outdoor Cultivation - if less than
25 square feet, $600 12.5 sq feet.
if more than 25 sq ft, then
$900/12.5 sq feet. 3.85(A)(2).
Richmond 7.04.139 Requires any person engaged in 10°-0($100 for each$1000)
business to pay an annual license tax.
payable in advance in the beginning of
the year.
No exemption for nun-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.P,',, ($25 for each $1000)
business to pay an annual license tax. 5.98.030(a).
No exemption for non-profits.
5.F. DISCUSSION ON THE LOCAL TAXATION OF MEDICAL CANNABIS
COOPERATIVES AND COLLECTIVES:
RECOMMENDATION: Direct staff as appropriate.
Item No. 5 . F .