La Puente Municipal Code Ch. 5.05 Medical Marijuana Cooperative Business License Tax

Sections:

• 5.05.010 Purpose and intent.

• 5.05.020 Definitions.

• 5.05.030 Payment of tax.

• 5.05.040 Payment—Timing.

• 5.05.050 Notice not required by city.

• 5.05.060 Declaration statement required.

• 5.05.070 Audit of declaration statement and payment.

• 5.05.080 Deficiency determinations.

• 5.05.090 Tax assessment; nonpayment.

• 5.05.100 Tax assessment; hearing.

• 5.05.110 Tax deemed debt to city.

• 5.05.120 Violations—Penalties.

This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation.

(Ord. 904 § 2 (part), 2010)

For the purpose of this chapter, unless it is plainly evident from the context that a different meaning is intended, the following definitions shall apply:

"Building" shall mean any structure having a roof supported by a columns or by walls and designed for the shelter or housing of any person, chattel or property of any kind. The word "building" includes the word "structure".

"Business license officer" shall have the same meaning as defined in Section 5.04.100 of Chapter 5.04 of this Code.

"City" shall mean City of La Puente.

"City council" shall mean the city council of the City of La Puente.

"Code" shall mean the La Puente Municipal Code.

"Gross receipts" shall mean the total of the amounts of monetary consideration actually received or receivable for medical marijuana, medical marijuana products, overhead costs, operating expenses or related services, whatsoever, including but not limited to: membership dues, any monetary contributions, payments, reimbursements or fees for cultivation, distribution, dispensing, storing, exchanging, processing, delivering, making available or transmitting medical marijuana, medical marijuana edible products pursuant to Health & Safety Code §§ 11362.5 and 11362.7-11362.83, overhead costs, operating expenses or services in connections therewith. Included in gross receipts shall be all receipts, cash, credits and property of any kind without deduction of the cost of the property sold, the cost of the materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever.

"Medical marijuana cooperative" shall have the same meaning as the term "Medical Marijuana Cooperative or Collective", as defined in Section 5.58.020 of Chapter 5.58 of this Code.

"Licensee" shall mean a person who has been issued a business license for transacting or carrying on the business of or operating a medical marijuana cooperative pursuant to Chapter 5.04 of this Code.

"Square foot" and "square footage" shall mean the horizontal areas of all floors, including usable basement and cellars, below the roof and within the outer surface of the main walls of buildings (or the center lines of party walls separating such building or portions thereof) or within lines drawn parallel to and two feet within the roof line of any building or portion thereof without walls (which includes square footage of all porches), and including pedestrian access walkways or corridors, but excluding the following:

(1) Areas used for off-street parking spaces or loading berths and driveways and maneuvering aisles relating thereto.

(2) Areas which are outdoor or semi-outdoor areas included as part of the building to provide a pleasant and health environment for the occupants thereof and the neighborhood in which the building is located. This exempted area is limited to stoops, balconies and to natural ground areas, terraces, pools and patios which are landscaped and developed for active or passive recreational use, and which are accessible for use by occupants of the building and which are not designed or used as sales, display, storage, service or production areas,

(3) Arcades, porticoes, and similar open areas which are located at or near street level, which are accessible to the general public, and which are not designed or used as sales, display, storage, service or production areas.

"Structure" shall mean anything constructed or erected, the use of which requires location on the ground or attachment to something having location on the ground.

(Ord. 904 § 2 (part), 2010)

(a) In addition to any requirements imposed by this Code, including but not limited to Chapter 5.04 and Title 5, each licensee operating a medical marijuana cooperative shall pay the following business license taxes:

(1) Any medical marijuana cooperative, exempted under Article XIII, Section 26 of the California Constitution from local taxes or fees measured by income or gross receipts, regardless of the number of square feet it occupies, shall pay an annual tax of one hundred dollars per square foot on premises occupied by such medical marijuana cooperative. For purposes of this section, all of the square feet of the premises owned, rented, leased or otherwise occupied or used by medical marijuana cooperative within the city shall be accumulated. The licensee shall establish that the medical marijuana cooperative is exempted from Article XIII, Section 26 of the California Constitution from local taxes or fees measured by income or gross receipts, by providing the business license officer with appropriate supporting documentation and records including but not limited to such a determination by the franchise tax board or any other information requested by the business license officer.

(2) Any medical marijuana cooperative, not exempted under Article XIII, Section 26 of California Constitution from local taxes or fees measured by income or gross receipts, shall pay an annual tax of ten percent per one thousand dollars of gross receipts.

(b) The city council may impose the tax authorized by this section at a lower rate. No action by the city council under this subsection shall prevent the city council from subsequently increasing the tax rate for medical marijuana cooperative to the maximum specified in this section.

(Ord. 904 § 2 (part), 2010)

(a) All taxes imposed by this chapter on medical marijuana cooperative shall be paid on quarterly basis, starting with the first day of the quarterly period in which the license is issued, namely, October 1st , January 1st , April 1st and July 1st. Payment of taxes imposed by this chapter shall be in the correct amount of taxes due and owing in accordance with Section 5.05.030 of this chapter. Such sums correctly reflecting taxes shall be accepted by the city, subject, however, to the city's right to conduct an audit pursuant to Section 5.05.070 of this chapter.

(b) In the case of a medical marijuana cooperative which has discontinued, dissolved or otherwise terminated its operations or business before the expiration of a tax period, the due date for any taxes accrued and owing to the city under the provisions of this chapter shall be the date that the city is notified by the medical marijuana cooperative of the discontinuance, dissolution or termination of its operations and surrender of its business license. A medical marijuana cooperative that has discontinued, dissolved or otherwise terminated its operation shall pay the city the taxes imposed by this chapter, however, the total amount due may be prorated.

(c) For failure to pay an annual license tax when due, the business license officer shall add a penalty of twenty-five percent of the tax amount past due on the thirtieth day of the month following the due date thereof, and an additional penalty of twenty-five percent of the tax base amount shall be added on the thirtieth day of each successive month thereafter up to a maximum penalty of one hundred percent, plus any administrative penalty regarding delinquent payments which has been imposed by a resolution adopted by the city council, as authorized by Section 5.04.150 of this Code.

(Ord. 904 § 2 (part), 2010)

The city is not required to send a delinquency or other notice or bill to any person subject to the provisions of this chapter, and failure to send such notice or bill shall not affect the validity of any tax, interest or penalty due under the provisions of this chapter.

(Ord. 904 § 2 (part), 2010)

(a) At the time of payment of the taxes imposed by this chapter, each medical marijuana cooperative to the tax under Section 5.05.030(a)(1), shall file with the business license officer a statement, under oath, setting forth square footage calculations of occupied premises together with any other information required by the business license officer to enable the administration, verification and calculation of taxes due to the city under this chapter.

(b) At the time of payment of taxes imposed by this chapter, each medical marijuana cooperative subject to the tax under Section 5.05.030(a)(2), shall file with the business license officer a statement, under oath and penalty of perjury, setting forth the gross receipts, together with all supporting records, statements and documentation and any other information required by the business license officer to enable the administration, verification and calculation of taxes due to the city under this chapter.

(c) A signed declaration shall be attached to the statement included therein, which shall be in substantially the same form as: "I hereby declare under penalty of perjury that the foregoing is true and correct".

(d) Pursuant to Section 5.05.070 of this chapter, the city shall have the right to audit the matters reported in the statement to determine the accuracy of the information and calculations contained therein.

(Ord. 904 § 2 (part), 2010)

(a) The city shall have the right to audit the matters referred to in the declaration statement, required by Section 5.05.060 and to determine the correctness of the figures set forth in such statement and the amount payable to the city pursuant to the provisions of Section 5.05.030.

(b) The books, records and accounts of any licensee may be inspected and audited by the city.

(c) Such an inspection and audit may be performed by the business license officer or his/her designee, a qualified certified public accountant or city official who shall be selected by the business license officer.

(d) To facilitate such audits, the licensee shall keep complete and accurate records of all gross receipts and transactions related to the receipt or disbursement of funds arising out of or related to the medical marijuana cooperative operations during the preceding three-year period. All such records shall be made available to the city for audit at the licensee's place of doing business during normal business hours after reasonable prior notice, which may be at least twenty-four hours prior to the audit.

(e) Any failure or refusal of any licensee to make and file a declaration statement within the required time period, or to pay such sums by way of taxes when the same are due and payable in accordance with the provisions of this chapter, or to permit such inspection of such books, records and accounts of such licensee shall be and constitute full and sufficient grounds for suspension or revocation of any business license or business permit for operation of a medical marijuana cooperative.

(Ord. 904 § 2 (part), 2010)

(a) If the business license officer is not satisfied, based on his/her good faith or reasonable belief, that a declaration statement filed, as required by Section 5.05.060 is correct, or that the amount of tax is correctly computed, the business license officer may compute and determine the amount to be paid and make a deficiency determination upon the basis of the facts contained in the declaration statement or upon the basis of any information in the city's possession.

(b) The city may make more than one deficiency determination of the amount of tax due for a period or periods.

(c) In the case of a medical marijuana cooperative, which is discontinued, dissolved or otherwise terminated, a deficiency determination may be made at any time within three years thereafter as to 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, the city shall provide a notice to the licensee concerned in the same manner as notices of assessment are given under Section 5.05.090.

(Ord. 904 § 2 (part), 2010)

(a) Under any of the following circumstances, the business license officer may make and give notice of an assessment of the amount of tax owed by a medical marijuana cooperative under this chapter:

(1) If the licensee has not filed any declaration statement required under Section 5.05.060 of this Chapter;

(2) If the licensee has not paid any tax due under the provisions of this chapter;

(3) If the licensee has not, after demand by the business license officer, filed a corrected declaration statement current deficiency(s) or furnished to the business license officer adequate substantiation of the information contained in the declaration statement, required by Section 5.05.060, already filed, or paid any additional amount of tax due under the provisions of this chapter.

(b) The notice of assessment shall separately set forth the amount of any tax known or estimated by the business license officer to be due, after full consideration of all information within his or her knowledge concerning the medical marijuana cooperative activities of the person or licensee assessed and shall include the amount of any penalties, costs or interest accrued on each amount to the date of the notice of assessment.

(c) The notice of assessment shall be served upon the licensee either by depositing the notice in the United States mail, postage prepaid thereon, addressed to the licensee at the address of the location of the business appearing on the face of the business license(s) issued under Title 5 to the licensee, or to such other address as the licensee registers with the business licensee officer for the purpose of receiving notices provided under this chapter. The service shall be deemed complete at the time of deposit into the United States mail.

(Ord. 904 § 2 (part), 2010)

(a) No later than ten days after the date of service of a notice under Section 5.05.090 of this chapter, the licensee may apply in writing to the business license officer for a hearing on the assessment. If application for a hearing before the business license officer is not made within the time herein prescribed, the tax assessed by the business license officer shall become final and conclusive.

(b) Within thirty days of the receipt of any timely written request for hearing, the business license officer shall cause the matter to be set for hearing before him or her not later than thirty days after the date requesting the hearing, unless a later date is agreed to by the business license officer and the licensee requesting the hearing.

(c) Notice of such hearing shall be given by the business license officer to the licensee requesting such a hearing not later than five days prior to such hearing. At such hearing, said licensee may appear and offer evidence why the assessment as made by the business license officer should not be confirmed and fixed as a tax. Formal rules governing the presentation and consideration of evidence and witnesses shall not apply to any hearing pursuant to this section.

(d) After such hearing, the business license officer shall determine and reassess the proper tax to be charged and shall, within thirty days of the hearing, give written notice thereof to the licensee in the manner prescribed in Section 5.05.090 for giving notice of assessment. The decision of the business license officer may be appealed to the city council pursuant to Section 5.04.300 of this Code.

(Ord. 904 § 2 (part), 2010)

The amount of any tax, penalties and interest imposed by the provisions of this chapter shall be deemed a debt to the city, and any licensee transacting business or operating a medical marijuana cooperative without having paid the tax under this chapter to the city shall be liable to 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 under this chapter.

(Ord. 904 § 2 (part), 2010)

(a) Any person violating any of the provisions of this chapter, or knowingly or intentionally misrepresenting to any authorized officer of the city any material fact in connection with the required payment of taxes under this chapter shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punishable as set forth in Section 1.08.040 of this Code.

(b) 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.

(c) No civil action shall prevent a criminal prosecution for any violation of the provisions of this chapter or of any state law requiring the payment of all taxes.

(Ord. 904 § 2 (part), 2010)