Borough of Neptune City, NJ Tax: Cannabis Transfer Tax and Cannabis User Tax

[Amended 7-25-2022 by Ord. No. 2022-10]

The cannabis transfer tax in Borough of Neptune City shall be fixed at a uniform percentage rate of 2% on all sales or transfers of cannabis products from any of the cannabis establishments that are located within the geographical boundaries of the Borough. This tax shall be imposed on:

(1)

Receipts from the sale of cannabis by a cannabis cultivator to another cannabis cultivator;

(2)

Receipts from the sale of cannabis items from one cannabis establishment to another cannabis establishment;

(3)

Receipts from the retail sales of cannabis items by a cannabis retailer to retail consumers who are 21 years of age or older; or any combination thereof.

A 2% transfer tax shall be collected from receipts from each sale by a cannabis wholesaler located within the geographical boundaries of the Borough.

A user tax is hereby also established at the same rate of the transfer tax as contained herein and shall be imposed on the value of each transfer or use of cannabis or cannabis items not otherwise subject to the transfer tax imposed pursuant to Subsection A, from the license holder's establishment that is located in the Borough to any of the other license holder's establishments, whether located in the Borough or another municipality.

The transfer tax or user tax imposed by this ordinance shall be in addition to any other tax imposed by law. Any transaction for which the transfer tax or user tax is imposed, or could be imposed pursuant to this section, other than those which generate receipts from the retail sales by cannabis retailers, shall be exempt from the tax imposed under the “Sales and Use Tax Act” (N.J.S.A. 54:32B-1 et seq). The transfer tax or user tax will be assessed and collected pursuant to established state law and administrative rules and regulations adopted regarding same.

In accordance with the provisions of N.J.S.A. 40:48I-1, section 40, every cannabis establishment required to collect the transfer and user taxes imposed by this chapter shall be personally liable for the transfer and user tax imposed, collected, or required by this chapter and under N.J.S.A. 40:48I-1, section 40.

Any cannabis establishment collecting a transfer tax or user tax shall have the same right with respect to collecting the tax from another cannabis establishment or the consumer as if the tax was a part of the sale and payable at the same time or with respect to nonpayment of the transfer tax or user tax by the cannabis establishment or consumer, as if the tax was part of the purchase price of the cannabis or cannabis item and payable at the same time, provided that the Chief Financial Officer of the Borough of Neptune City which imposes the transfer tax and user tax is joined as a party in any action or proceeding brought to collect the transfer tax or user tax.

No cannabis establishment required to collect the transfer and user taxes imposed by this chapter shall advertise or hold out to any person or to the public in general, in any manner, directly or indirectly, that the transfer tax or user tax will not be separately charged and stated to another cannabis establishment or the consumer or that the transfer tax or user tax will be refunded to the cannabis establishment or the consumer.

Each cannabis establishment collecting transfer and user taxes pursuant to this chapter shall be remitted to the Tax Collector of the Borough of Neptune City, on a basis to be determined by the Chief Financial Officer.

Delinquent taxes. If a licensee is a lessee of the parcel of the real property comprising the cannabis establishment premises, and the licensee/lessee becomes delinquent in submitting either the transfer or user taxes for more than 30 days, the Borough may refer the licensee/lessee to the Borough Administrator to consider any actions to be taken, including but not limited to, penalties to be imposed, suspension of the license, disallowance of a license renewal or any other remedies allowed by law.

If the licensee is the owner of the parcel of real property comprising the cannabis establishment premises, and if the transfer tax or user tax is not paid when due, the unpaid balance, and any interest accruing thereon, shall be a lien on the parcel of real property comprising the cannabis establishment's premises. The annual Borough license issued pursuant to this chapter shall not be renewed for the cannabis establishment should any transfer or user tax pursuant to this chapter be delinquent.

The lien shall be superior and paramount to the interest in the parcel of any owner, lessee, tenant, mortgagee, or other person, except the lien of municipal taxes, and shall be on a parity with and deemed equal to the municipal lien on the parcel for unpaid property taxes due and owing in the same year.

The Borough shall file with the Tax Collector, a statement showing the amount and due date of the unpaid balance of cannabis taxes and identifying the lot and block number of the parcel of real property that comprises the delinquent cannabis establishment's premises. The lien shall be enforced as a municipal lien in the same manner as all other municipal liens are enforced.