Point Arena Municipal Code Ch. 3.40 Cannabis and Marijuana Tax

(1) Every person engaged in operating or otherwise conducting a cannabis or marijuana business shall pay a cannabis and marijuana tax of not more than seven cents for each $1.00 of proceeds or fractional part thereof, except for medical cannabis and marijuana licensed businesses.

(2) Every person engaged in operating or otherwise conducting a medical cannabis or marijuana business shall pay a medical cannabis and marijuana tax of not more than three cents for each $1.00 of proceeds or fractional part thereof.

(Ord. 228 § 1, 2016.)

For purposes of this chapter:

"Cannabis or marijuana business"

means any activity regulated or permitted by Point Arena Municipal Code Section 5.20. as may be amended from time to time, or any other activity or business that involves planting, cultivating, harvesting, transporting, dispensing, delivering, providing, manufacturing, converting, compounding, processing, preparing, storing, packaging, or testing any part of the marijuana plant for medicinal or recreational use.

"Proceeds" and/or "gross sales"

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 business in exchange for the products the business offers for sale or trade.

(Ord. 228 § 1, 2016.)

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 under local and state law and this code. No provision in this code can lower the tax rate set forth in this chapter or otherwise reduce the amount of taxes paid hereunder unless the provision specifically states that the reduction applies.

(Ord. 228 § 1, 2016.)

Each operator shall, on or before the last day of the month following the close of each calendar quarter or at the close of any shorter reporting period which may be established by the city manager, on forms provided by the city, report the total sales of the cannabis and marijuana business. At the time the return is filed, the full amount of the tax owed shall be remitted to the city. The city manager may establish shorter reporting periods for any certificate holder if they deem it necessary in order to ensure collection of the tax and may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason.

(Ord. 228 § 1, 2016.)

It shall be the duty of every marijuana and cannabis business operator to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for payment to the city, which records the city manager, or a designated agent of the city, shall have the right to inspect and audit at all reasonable times.

(Ord. 228 § 1, 2016.)

Upon approval by the voters the initial implementation of the tax will be effective February 1, 2017. Medical marijuana/cannabis businesses will be taxed at a rate of three percent of gross sales. Recreational marijuana/cannabis businesses will be taxed at a rate of seven percent of gross sales.

(Ord. 228 § 1, 2016.)

The city council may, by resolution, implement the tax at a lower rate than the maximum for marijuana 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 under local and state law. No action by the council under this section shall prevent it from later increasing the tax to the maximum stated level or removing any exemption, incentive, or reduction, and restoring the maximum tax specified in this chapter.

(Ord. 228 § 1, 2016.)

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 under state law unless otherwise authorized and allowed in strict and full conformance to the provisions of this code, including, without limitation, the provisions of Chapter 5.20 nothing in this chapter shall be applied or construed as authorizing the sale of marijuana.

(Ord. 228 § 1, 2016.)

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 customer, member, patient, or caretaker.

(Ord. 228 § 1, 2016.)

(1) This chapter was submitted to the voters for approval. Any amendment to this chapter to increase the tax above the rate expressly provided in this chapter 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.

(2) The city manager or the city manager's designee shall promulgate rules, regulations, and procedures to implement and administer this 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.

(3) 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.

(4) 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 with the revenues generated by the cannabis and marijuana tax.

(Ord. 228 § 1, 2016.)