Article 5 — Cannabis Business Tax

This article shall be known as the "Cannabis Business Tax Ordinance." (Ord. 23-940, § 1)

The purpose of this article is to adopt a tax, for revenue purposes, pursuant to Sections 37101 and 37100.5 of the California Government Code, upon cannabis businesses that engage in business in the City. The cannabis business tax is levied based upon business gross receipts except for commercial cannabis or industrial hemp cultivation which shall be taxed on square footage. It is not a sales and use tax, a tax upon income, or a tax upon real property.

The cannabis business tax is a general tax enacted solely for general, governmental purposes of the City and not for specific purposes. All of the proceeds from the tax imposed by this article shall be placed in the City's general fund and be available for any lawful municipal purpose. (Ord. 23-940, § 1)

The intent of this article is to levy a tax on all cannabis or industrial hemp businesses that operate in the City, regardless of whether such business would have been legal at the time this article was adopted. Nothing in this article shall be interpreted to authorize or permit any business activity that would not otherwise be legal or permissible under laws applicable to the activity at the time the activity is undertaken.

(Ord. 23-940, § 1)

The following words and phrases shall have the meanings set forth below when used in this article:

"Business" shall include all activities engaged in or caused to be engaged in within the City, including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling, or livelihood, whether or not carried on for gain or profit, but shall not include the services rendered by an employee to his or her employer.

"Calendar year" means January 1 through December 31, of the same year.

"Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" shall not include "industrial hemp," unless otherwise specified.

"Cannabis product" means raw cannabis that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. "Cannabis product" also means cannabis products as defined by Section 11018.1 of the California Health and Safety Code and is not limited to medicinal cannabis products.

"Canopy" means all areas occupied by any portion of a cannabis or industrial hemp plant whether contiguous or noncontiguous on any one site. When plants occupy multiple horizontal planes (as when plants are placed on shelving above other plants) each plane shall be counted as a separate canopy area.

"Cannabis business" means any business activity involving cannabis or industrial hemp, including, but not limited to, cultivating, transporting, distributing, manufacturing, compounding, converting, processing, preparing, storing, packaging, delivering, testing, dispensing, retailing and wholesaling of cannabis, cannabis products, industrial hemp, industrial hemp products or of ancillary products and accessories, whether or not carried on for gain or profit.

"Cannabis business tax or business tax" means the tax due pursuant to this article for engaging in a cannabis business in the City.

"Commercial cannabis cultivation" means cultivation of cannabis or industrial hemp undertaken in the course of conducting a cannabis business.

"Commercial cannabis permit" means a permit issued by the City to a person to authorize that person to operate a cannabis business or engage in business as a cannabis business within the City.

"Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis or industrial hemp and includes, but is not limited to, the operation of a nursery.

"Employee" means each and every person engaged in the operation or conduct of any business, whether as owner, member of the owner's family, partner, associate, agent, manager or solicitor, and each and every other person employed or working in such business for a wage, salary, commission, barter or any other form of compensation.

"Engaged in business as a cannabis business" means the commencing, conducting, operating, managing or carrying on of a cannabis business, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities. A person shall be deemed engaged in business within the City if:

• (1) Such person or person's employee maintains a fixed place of business within the City for the benefit or partial benefit of such person;

• (2) Such person or person's employee owns or leases real property within the City for business purposes;

• (3) Such person or person's employee regularly maintains a stock of tangible personal property in the City for sale in the ordinary course of business;

• (4) Such person or person's employee regularly conducts solicitation of business within the City; or

• (5) Such person or person's employee performs work or renders services in the City. The foregoing specified activities shall not be a limitation on the meaning of "engaged in business."

"Evidence of doing business" means evidence such as, without limitation, use of signs, circulars, cards or any other advertising media, including the use of internet or telephone solicitation, or representation to a government agency or to the public that such person is engaged in a cannabis business in the City.

"Gross receipts," except as otherwise specifically provided, means, whether designated a sales price, royalty, rent, slotting fee, commission, dividend, or other designation, the total amount (including all receipts, cash, credits, services and property of any kind or nature) received or payable for sales of goods, wares or merchandise, or for the performance of any act or service of any nature for which a charge is made or credit allowed (whether such service, act or employment is done as part of or in connection with the sale of goods, wares, merchandise or not), without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, losses or any other expense whatsoever. However, the following shall be excluded from gross receipts:

• (1)

  • Cash discounts where allowed and taken on sales;

• (2) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

• (3) Such part of the sale price of any property returned by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts;

• (4) Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the taxpayer in the regular course of the taxpayer's business;

• (5) Cash value of sales, trades or transactions between departments or units of the same business located in the City of Artesia or if authorized by the Tax Administrator in writing in accordance with Section 3-5.514(b);

• (6) Whenever there are included within the gross receipts amounts which reflect sales for which credit is extended and such amount proved uncollectible in a subsequent year, those amounts may be excluded from the gross receipts in the year they prove to be uncollectible; provided, however, if the whole or portion of such amounts excluded as uncollectible are subsequently collected they shall be included in the amount of gross receipts for the period when they are recovered;

• (7) Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one ($1.00) dollar;

• (8) Amounts collected for others where the business is acting as an agent or trustee and to the extent that such amounts are paid to those for whom collected. These agents or trustees must provide the City's Administrative Services Department with the names and the addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustees.

• (9) Retail sales of t-shirts, sweaters, hats, stickers, key chains, bags, books, posters, rolling papers, cannabis accessories such as pipes, pipe screens, vape pen batteries (without cannabis or industrial hemp) or other personal tangible property which the Tax Administrator has excluded in writing by issuing an administrative ruling per Section 3-5.514 shall not be subject to the cannabis business tax under this article. However, any business activities not subject to this article as a result of an administrative ruling shall be subject to the appropriate business tax provisions of Title 3, Chapter 5 or any other title or chapter of this Code as determined by the Tax Administrator.

"Industrial hemp" means a crop that is limited to types of the plant Cannabis sativa L. having no more than three-tenths of 1% tetrahydrocannabinol (THC) contained in the dried flowering tops, whether growing or not; the seeds of the plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin produced therefrom.

"Industrial hemp products" means any raw hemp that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. "Hemp product" also means hemp products as defined by Section 11018.5 of the California Health and Safety Code.

"Lighting" means a source of light that is primarily used for promoting the biological process of plant growth. Lighting does not include sources of light that primarily exist for the safety or convenience of staff or visitors to the facility, such as emergency lighting, walkway lighting, or light admitted via small skylights, windows or ventilation openings.

"Medicinal cannabis or medicinal cannabis product" means cannabis or a cannabis product, intended to be sold or sold for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code, for a medicinal cannabis patient in California who possesses a physician's recommendation, or a cannabis card issued pursuant to Health and Safety Code Section 11362.71.

"Nursery" means a facility or part of a facility that is used only for producing clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis or industrial hemp industrial hemp.

"Person" means an individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, whether organized as a nonprofit or for-profit entity, and includes the plural as well as the singular number.

"Processing" means a cultivation site that conducts only trimming, drying, curing, grading, packaging, or labeling of cannabis, industrial hemp and non-manufactured cannabis products.

"Sale, sell, and to sell" means and includes any sale, exchange, or barter. It shall also mean any transaction whereby, for any consideration, title to cannabis, cannabis products, industrial hemp and/or industrial hemp products are transferred from one person to another and includes the delivery of cannabis, cannabis products, industrial hemp and/or industrial hemp products pursuant to an order placed for the purchase of the same, but does not include the return of cannabis, cannabis products, industrial hemp and/or industrial hemp products to the licensee from whom the cannabis, cannabis product, industrial hemp and/or industrial hemp product was purchased.

"State" means the State of California.

"State license, license, or registration" means a State license issued pursuant to California Business and Professions Code Section 26050, and all other applicable State laws, required for operating a cannabis business.

"Tax administrator" means the City Manager of the City of Artesia or designee.

"Testing laboratory" means a cannabis business that: (1) offers or performs tests of cannabis, cannabis products, industrial hemp and/or industrial hemp products; (2) offers no service other than such tests; (3) sells no products, excepting only testing supplies and materials; (4) is accredited by an accrediting body that is independent from all other persons involved in the cannabis industry in the State; and (5) is registered with the Bureau of Cannabis Control or other State agency.

(Ord. 23-940, § 1)

• (a) Beginning January 1, 2021, there is imposed upon each person who is engaged in business as a cannabis business a cannabis business tax. Such tax is payable regardless of whether the business has been issued a business license or commercial cannabis permit to operate lawfully in the City or is operating unlawfully. The City's acceptance of a cannabis business tax payment from a cannabis business operating illegally shall not constitute the City's approval or consent to such illegal operations.

• (b) The City Council may, by resolution or ordinance, increase or decrease the rate of the cannabis business tax, including the initial rate of cannabis business tax. The City Council may, by resolution or ordinance, increase or decrease the rate of the medicinal cannabis business tax, including the initial rate of the medicinal business tax, independent of other cannabis business tax activities. In addition, the City Council may, by resolution or ordinance, increase or decrease the rate of the cannabis business tax on hemp or hemp products, including the initial rate of the tax on hemp or hemp products independent of other cannabis activities. Notwithstanding the foregoing, in no event shall the City Council repeal this tax, or set any adjusted rate that exceeds the maximum rates calculated pursuant to this section.

• (c) The maximum rate of the cannabis business tax shall be calculated as follows:

  • (1) For every person engaged in commercial cannabis cultivation, including cultivation of industrial hemp, in the City through January 1, 2024, the annual maximum rate shall be $20 per square foot of canopy spaced used for cultivation or nursery.

    • (i) On January 1, 2024 and on each January 1 thereafter, the maximum annual tax rates specified in subsection (c)(1), shall increase by the percentage increase in the Consumer Price Index ("CPI") for All Urban Consumers in the Los AngelesLong Beach-Anaheim area as published by the United States Government Bureau of Labor Statistics or three percent whichever is greater.

  • (2) For every person engaged in the operation of a testing laboratory, retail sales, distribution, manufacturing and/or processing for cannabis, cannabis products, industrial hemp and/or industrial hemp products, or any other type of cannabis business not described in this section she, he or it shall be subject to an annual tax rate of seven percent of gross receipts.

• (d) Persons subject to the cannabis business tax shall register with the City and pay the registration fee pursuant to Section 3-5.506. They shall also be required to obtain a business license pursuant to Chapter 1 of Title 3 of this Code; provided, however, that cannabis business activities subject to the cannabis business tax shall be excluded from determining the amount of any business license tax payable under Chapter 1 of Title 3.

• (Ord. 23-940, § 1; Ord. 24-949, 2/12/2024)

• (a) Registration of Cannabis Business. All cannabis businesses shall be required to annually register as follows:

  • (1) All persons engaging in business as a cannabis business, whether an existing, newly established or acquired business shall register with the Tax Administrator within 30 days of commencing operation and shall annually renew such registration within 30 days of the business registration of each year thereafter. In registering, such persons shall furnish to the Tax Administrator a sworn statement, upon a form provided by the Tax Administrator, setting forth the following information:

    • (i) The name of the business;

    • (ii) The names and addresses of each owner;

    • (iii) The exact nature or kind of business;

    • (iv) The place where such business is to be carried on; and

    • (v) Any additional information which the Tax Administrator may require.

• (b) An annual registration fee of $500 shall be presented with the sworn statement submitted under this section. This fee shall not be considered a tax and may be adjusted by resolution of the City Council.

• (c) The cannabis business tax imposed by this article shall be paid, in arrears, on a monthly basis. Each person owing a cannabis business tax each calendar month shall, no later than the fifteenth (15th) day following the close of the calendar month, file with the Tax Administrator a statement ("tax statement") of the tax owed for that calendar month and the basis for calculating that tax. The Tax Administrator may require that the tax statement be submitted on a form prescribed by the Tax Administrator. The tax for each calendar month shall be due and payable on that same date that the tax statement for the calendar month is due.

• (d) Upon cessation of a cannabis business, tax statements and payments shall be immediately due for all calendar months up to the calendar month during which cessation occurred.

• (e) The Tax Administrator may, at his or her discretion, establish alternative reporting and payment periods for any taxpayer as the Tax Administrator deems necessary to ensure effective collection of the cannabis business tax. The Tax Administrator may also require that a deposit, to be applied against the taxes for a calendar month, be made by a taxpayer at the beginning of that calendar month. In no event shall the deposit required by the Tax Administrator exceed the tax amount he or she projects will be owed by the taxpayer for the calendar month. The Tax Administrator may require that a taxpayer make payments via a cashier's check, money order, wire transfer, or similar instrument.

• (Ord. 23-940, § 1)

Whenever any payment, statement, report, request or other communication is due, it must be received by the Tax Administrator on or before the final due date. A postmark will not be accepted as timely remittance. If the due date would fall on a Friday, Saturday, Sunday, or a holiday observed by the City, the due date shall be the next regular business day on which the City is open to the public.

(Ord. 23-940, § 1)

Unless otherwise specifically provided under other provisions of this article, the taxes required to be paid pursuant to this article shall be deemed delinquent if not received by the Tax Administrator on or before the due date as specified in Sections 3-5.506 and 3-5.507. (Ord. 23-940, § 1)

The City may as a courtesy send a tax notice to the cannabis business which owes the City a cannabis business tax. However, the Tax Administrator is not required to send a delinquency or other notice or bill to any person subject to the provisions of this article. Failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this article.

(Ord. 23-940, § 1)

• (a) Any person who fails or refuses to pay any cannabis business tax required to be paid pursuant to this article on or before the due date shall pay penalties and interest as follows:

  • (1) A penalty equal to 10% 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 the rate of one (1.0%) percent per month.

  • (2) If the tax remains unpaid for a period exceeding one calendar month beyond the due date, an additional penalty equal to 25% of the amount of the tax, plus interest at the rate of one (1.0%) percent per month on the unpaid tax and on the unpaid penalties.

  • (3) Interest shall be applied at the rate of one (1.0%) percent per month on the first day of the month for the full month and will continue to accrue monthly on the tax and penalty until the balance is paid in full.

• (b) Whenever a check or electronic payment is submitted in payment of a cannabis business tax and the payment is subsequently returned unpaid by the bank for any reason, the taxpayer will be liable for the tax amount due plus any fees, penalties and interest as provided for in this section, and any other amount allowed under State law.

• (Ord. 23-940, § 1)

• (a) No refund shall be made of any tax collected pursuant to this article, except as provided in Section 3-5.512.

• (b) No refund of any tax collected pursuant to this article shall be made because of the discontinuation, dissolution, or other termination of a business.

• (Ord. 23-940, § 1)

• (a) Whenever the amount of any cannabis business tax, penalty or interest has been overpaid, paid more than once, or has been erroneously collected or received by the City under this article, it may be refunded to the claimant who paid the tax provided that a written claim for refund is filed with the Tax Administrator within one year of the date the tax was originally due or paid, whichever came first.

• (b) The Tax Administrator, designee or any other City officer charged with the administration of this article 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 refuses to allow such examination of claimant's books and business records after request by the Tax Administrator to do so.

• (c) In the event that the cannabis business tax was erroneously paid in an amount in excess of the tax due, and the error is attributable to the City, the City shall refund the amount of tax erroneously paid; provided that: (1) a claim for refund has been timely filed with the Tax Administrator; and (2) the refund cannot exceed, under any circumstance, the amount of tax overpaid during the 12 months preceding the last month for which the claim states the tax was overpaid).

• (Ord. 23-940, § 1)

The provisions of this article shall not apply to personal cannabis cultivation or personal use of cannabis, to the extent those activities are authorized in the "Medicinal and Adult Use Cannabis Regulation and Safety Act," as may be amended. This article shall not apply to personal use of cannabis that is specifically exempted from State licensing requirements, that meets the definition of personal use or equivalent terminology under State law, and provided that the individual receives no compensation whatsoever related to that personal cultivation or use. (Ord. 23-940, § 1)

• (a) It shall be the duty of the Tax Administrator to collect the taxes, penalties, fees, and perform the duties required by this article.

• (b) For purposes of administration and enforcement of this article generally, the Tax Administrator may from time to time promulgate such administrative interpretations, rules, and procedures consistent with the purpose, intent, and express terms of this article as he or she deems necessary to implement or clarify such provisions or aid in enforcement.

• (c) The Tax Administrator may take such administrative actions as needed to administer the cannabis business tax, including, but not limited to:

  • (1) Provide to all cannabis business taxpayers forms for the reporting of the tax;

  • (2) Provide information to any taxpayer concerning the provisions of this article;

  • (3) Receive and record all taxes remitted to the City as provided in this article;

  • (4) Maintain records of taxpayer reports and taxes collected pursuant to this article;

  • (5) Assess penalties and interest to taxpayers pursuant to this article;

(6) Determine amounts owed under and enforce collection pursuant to this article. (Ord. 23-940, § 1)

Any taxpayer aggrieved by any decision of the Tax Administrator with respect to the amount of tax, interest, penalties and fees, if any, due under this article may appeal to the City Council by filing a notice of appeal with the City Clerk within 30 calendar days of the serving or mailing of the Tax Administrator's determination of the amount due. The City Clerk, or designee, shall fix a time and place for hearing such appeal, and the City Clerk, or designee, shall give notice in writing to such operator at the last known place of address. The finding of the City Council shall be final and conclusive and shall be served upon the appellant in the manner prescribed by this section for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.

(Ord. 23-940, § 1)

Any taxes, penalties and/or fees required to be paid under the provisions of this article shall be deemed a debt owed to the City. Any person owing money to the City under the provisions of this article shall be liable in an action brought in the name of the City for the recovery of such debt. The provisions of this article shall not be deemed a limitation upon the right of the City to bring any other action including criminal, civil and equitable actions, based upon the failure to pay the tax, penalties and/or fees imposed by this article or the failure to comply with any of the provisions of this article.

(Ord. 23-940, § 1)

If a business subject to the tax is operating both within and outside the City, it is the intent of the City to apply the cannabis business tax so that the measure of the tax fairly reflects the proportion of the taxed activity actually carried on in the City. To the extent Federal or State law requires that any tax due from any taxpayer be apportioned, the taxpayer may indicate said apportionment on his or her tax return. The Tax Administrator may promulgate administrative procedures for apportionment as he or she finds useful or necessary. (Ord. 23-940, § 1)

This tax is intended to be applied in a manner consistent with the United States and California Constitutions and State law. None of the tax provided for by this article shall be applied in a manner that causes an undue burden upon interstate commerce, a violation of the equal protection or due process clauses of the Constitutions of the United States or the State of California or a violation of any other provision of the California Constitution or State law. If a person believes that the tax, as applied to him or her, is impermissible under applicable law, he or she may request that the Tax Administrator release him or her from the obligation to pay the impermissible portion of the tax.

(Ord. 23-940, § 1)

• (a) For the purpose of ascertaining the amount of cannabis business tax owed or verifying any representations made by any taxpayer to the City in support of his or her tax calculation, the Tax Administrator shall have the power to inspect any location where commercial cannabis cultivation occurs and to audit and examine all books and records (including, but not limited to, bookkeeping records, state and federal income tax returns, and other records relating to the gross receipts of the business) of persons engaged in cannabis businesses. In conducting such investigation, the tax administrator shall have the power to inspect any equipment, such as computers or point of sale machines that may contain such records.

• (b) It shall be the duty of every person liable for the collection and payment to the City of any tax imposed by this article to keep and preserve, for a period of at least three years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator or designee shall have the right to inspect at all reasonable times.

• (Ord. 23-940, § 1)

• (a) Nothing contained in this article shall be deemed to repeal, amend, be in lieu of, replace or in any way affect any requirements for any commercial cannabis permit or City license required by, under or by virtue of any provision of any other article or chapter of this Code or any other ordinance or resolution of the City, nor be deemed to repeal, amend, be in lieu of, replace or in any way affect any tax, fee or other charge imposed, assessed or required under any other article or chapter of this Code or any other ordinance or resolution of the City. Any references made or contained in any other article or chapter of this Code to any licenses, license taxes, fees, or charges, or to any schedule of license fees, shall be deemed to refer to the licenses, license taxes, fees or charges, or schedule of license fees, provided for in other articles or chapters of this Code.

• (b) The Tax Administrator may revoke or refuse to renew the license required by this article for any business that is delinquent in the payment of any tax due pursuant to this article or that fails to make a deposit required by the Tax Administrator pursuant to Section 3-5.506.

A commercial cannabis permit issued under the Artesia Municipal Code may be revoked, suspended or not renewed in the event that the business holding that permit has failed to: (1) make a deposit required by the Tax Administrator pursuant to Section 3-5.506; or (2) timely pay all taxes, interest and penalties owed by that business under this article. (Ord. 23-940, § 1)

• (a) The payment of a cannabis business tax required by this article, and its acceptance by the City, shall not entitle any person to carry on any cannabis business unless the person has complied with all of the requirements of this Code and all other applicable State laws.

• (b) No tax paid under the provisions of this article shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any local or State law.

• (Ord. 23-940, § 1)

If the Tax Administrator is not satisfied that any statement filed as required under the provisions of this article 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 within three years of the date the tax was originally due and payable. 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 cannabis business, a deficiency determination may be made at any time within three years thereafter as to any liability arising from engaging in such cannabis 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 Section 3-5.524.

(Ord. 23-940, § 1)

• (a) Under any of the following circumstances, the Tax Administrator may make and give notice of an assessment of the amount of tax owed by a person under this article at any time:

  • (1) If the person has not filed a complete statement required under the provisions of this article;

  • (2) If the person has not paid the tax due under the provisions of this article;

  • (3) If the person has not, after demand by the Tax Administrator, filed a corrected statement, or furnished to the Tax Administrator adequate substantiation of the information contained in a statement already filed, or paid any additional amount of tax due under the provisions of this article; or

  • (4) If the Tax Administrator determines that the nonpayment of any cannabis business tax due under this article is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to penalties and interest otherwise payable under this article and any other penalties allowed by law.

• (b) The notice of assessment shall separately set forth the amount of any tax known by the Tax Administrator to be due or estimated by the Tax Administrator, after consideration of all information within the Tax Administrator's knowledge concerning the business and activities of the person assessed, to be due under each applicable provision of this article and shall include the amount of any penalties or interest accrued on each amount to the date of the notice of assessment.

• (Ord. 23-940, § 1)

The notice of assessment shall be served upon the person either by personal delivery, by overnight delivery by a nationally-recognized courier service, 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 or to such other address as he or she shall register with the Tax Administrator for the purpose of receiving notices provided under this article; or, should the person have no address registered with the Tax Administrator for such purpose, then to such person's last known address. For the purpose of Section 3-5.524, a service by overnight delivery shall be deemed to have occurred one calendar day following deposit with a courier and service by mail shall be deemed to have occurred three days following deposit in the United States mail. (Ord. 23-940, § 1)

Within 30 calendar days after the date of service of the notice of assessment the person may apply in writing to the Tax Administrator 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 Tax Administrator shall become final and conclusive. Within 30 calendar days of the receipt of any such application for hearing, the Tax Administrator shall cause the matter to be set for hearing before him or her no later than 30 calendar days after the receipt of the application, unless a later date is agreed to by the Tax Administrator and the person requesting the hearing. Notice of such hearing shall be given by the Tax Administrator to the person requesting such hearing not later than five calendar days prior to such hearing. At such hearing said applicant may appear and offer evidence why the assessment as made by the Tax Administrator should not be confirmed and fixed as the tax due. After such hearing the Tax Administrator shall determine and reassess (if necessary) the proper tax to be charged and shall give written notice to the person in the manner prescribed in Section 3-5.524 for giving notice of assessment. (Ord. 23-940, § 1)

• (a) If a cannabis business is unable to comply with any tax requirement imposed under this article due to a disaster, the business may notify the Tax Administrator of its inability to comply and request relief from the tax requirement. For purposes of this article, "disaster" means fire, flood, storm, tidal wave, earthquake, or similar public calamity, whether or not resulting from natural causes.

• (b) The cannabis business shall provide any information required by the Tax Administrator, including, without limitation, why relief is requested, the time period for which the relief is requested, and the reason relief is needed for the specific amount of time. The cannabis business agrees to grant the Tax Administrator or designee access to the location where the cannabis business has been impacted due to a disaster.

• (c) The Tax Administrator, in his or her sole discretion, may provide relief from the cannabis business tax requirement for businesses whose operations have been impacted by a disaster if such tax relief does not exceed $15,000. Such temporary relief may be granted for a reasonable amount of time, in the Tax Administrator's sole discretion, and the amount and duration of relief should be based upon how long it would reasonably take for the cannabis business to recover from the disaster. The Tax Administrator may require that the cannabis business follow certain conditions to receive temporary relief from the cannabis business tax requirement.

• (Ord. 23-940, § 1)

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 article or of any state law requiring the payment of all taxes. (Ord. 23-940, § 1)

Any person violating any of the provisions of this article shall be guilty of a misdemeanor. (Ord. 23-940, § 1)

If any provision of this article, or its application to any person or circumstance, is determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this article or the application of this article to any other person or circumstance and, to that end, the provisions hereof are severable. (Ord. 23-940, § 1)

All remedies and penalties prescribed by this article or which are available under any other provision of this Code and any other provision of law or equity are cumulative. The use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this article.

(Ord. 23-940, § 1)

Except as set forth in this section, this article may be amended or modified but not repealed by the City Council without a vote of the people. However, as required by Article XIII C of the California Constitution, voter approval is required for any amendment that would expand, extend, or increase the rate of any tax levied pursuant to this article. The people of the City of Artesia affirm that the following actions shall not constitute an increase of the rate of a tax:

• (a) The restoration or adjustment of the rate of the tax to a rate that is no higher than that allowed by this article, in those circumstances where, among others, the City Council has previously acted to reduce the rate of the tax or is incrementally implementing an increase authorized by this article;

• (b) An action that interprets or clarifies: (1) the methodology of applying or calculating the tax, or (2) any definition applicable to the tax, so long as the interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the provisions of this Article 5; or

• (c) The collection of the tax imposed by this article even if the City had, for some period of time, failed to collect the tax.

• (Ord. 23-940, § 1)

Article 6 General Transactions and Use Tax

This chapter shall be known as the "City of Artesia General Transactions and Use Tax Ordinance." The City of Artesia hereinafter shall be called "City." This chapter shall be applicable in the incorporated territory of the City. (Ord. 24-953, 11/9/2024)

This chapter is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:

• (a) To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.

• (b) To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.

• (c) To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.

• (d) To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record-keeping upon persons subject to taxation under the provisions of this chapter.

• (Ord. 24-953, 11/9/2024)

Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. (Ord. 24-953, 11/9/2024)

For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of three-quarters percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of the ordinance codified in this chapter. (Ord. 24-953, 11/9/2024)

For the purposes of this chapter, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.

(Ord. 24-953, 11/9/2024)

An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of the ordinance codified in this chapter for storage, use or other consumption in said territory at the rate of threequarters percent of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

(Ord. 24-953, 11/9/2024)

Except as otherwise provided in this chapter and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this chapter as though fully set forth herein. (Ord. 24-953, 11/9/2024)

In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

• (a) Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:

  • (1) The word "State" is used as a part of the title of the State Controller, State Treasurer, California Victim Compensation Board, California Department of Tax and Fee Administration, State Treasury, or the Constitution of the State of California;

  • (2) The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California

Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this chapter.

• (3) In those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:

  • (i) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code; or

  • (ii) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

• (4) In reference to Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.

• (b) The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 of the Revenue and Taxation Code and in the definition of that phrase in Section 6203.

• (1) "A retailer engaged in business in the City" shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this State or for delivery in the State by the retailer and all persons related to the retailer that exceeds $500,000. For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.

• (Ord. 24-953, 11/9/2024)

If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this chapter. (Ord. 24-953, 11/9/2024)

• (a) There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any City, City and County, or County pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any State-administered transactions or use tax.

• (b) There are exempted from the computation of the amount of transactions tax the gross receipts from:

  • (1) Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the County in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United

States, or any foreign government.

• (2) Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:

  • (i) With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an outof-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and

  • (ii) With respect to commercial vehicles, by registration to a place of business outof-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.

• (3) The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this chapter.

• (4) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of the ordinance codified in this chapter.

• (5) For the purposes of subparagraphs (3) and (4) of this subsection, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

• (c) There are exempted from the use tax imposed by this chapter, the storage, use or other consumption in this City of tangible personal property:

• (1) The gross receipts from the sale of which have been subject to a transactions tax under any State-administered transactions and use tax ordinance.

  • (2) Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.

  • (3) If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this chapter.

  • (4) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this chapter.

  • (5) For the purposes of subparagraphs (3) and (4) of this subsection, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

  • (6) Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.

  • (7) "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.

• (d) Any person subject to use tax under this chapter may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for, a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

• (Ord. 24-953, 11/9/2024)

All amendments subsequent to the effective date of this chapter to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this chapter, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this chapter.

(Ord. 24-953, 11/9/2024)

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this chapter, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. (Ord. 24-953, 11/9/2024)

The tax imposed by this chapter shall continue until the ordinance codified in this chapter is repealed.

(Ord. 24-953, 11/9/2024)

CHAPTER 6

CABLE, VIDEO, AND TELECOMMUNICATIONS SERVICE PROVIDERS

Editor's Note: Former Chapter 6, Cable Television Franchises, previously codified herein and containing portions of Ord. Nos. 364, 399 and 543, has been redesignated as an uncodified ordinance pursuant to Section 1 of Ord. No. 629 and is subject to repeal in accordance with the provisions of Section 3 of Ord. 629.