This chapter shall be known as the "Cannabis Business Tax Ordinance."
This chapter shall be applicable in the City of Claremont, California
which shall be referred to herein as "City."
(22-09)
The purpose of this chapter is to adopt a tax, for revenue purposes,
pursuant to Sections 37101 and 37100.5 of the Revenue and Taxation
Code, upon cannabis and hemp businesses that engage in business in
the City. The cannabis business tax is levied based upon business
gross receipts except for commercial cannabis cultivation or commercial
industrial hemp cultivation which shall be taxed on square footage
or gross receipts. It is not a sales and use tax, a tax upon income,
or a tax upon real property and shall not be calculated or assessed
as such. The cannabis business tax shall not be separately identified
or otherwise specifically assessed or charged to any member, customer,
patient, or caretaker. 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 chapter shall be placed in the City's general fund and be
available for any lawful City purpose.
(22-09)
The intent of this chapter 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 chapter
was adopted. Nothing in this chapter 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.
(22-09)
The following words and phrases shall have the meanings set
forth below when used in this chapter:
means a sale entered into in good faith and for valuable
consideration at a sales price that reflects the fair market value
in the open market between two informed and willing parties, neither
under any compulsion to participate in the transaction.
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.
means January 1 through December 31, of the same year.
shall have the same meaning as the term defined in the Medicinal
and Adult-Use Cannabis Regulation and Safety Act, California Business
and Professions Code Section 26000, et seq., as amended from time
to time or replaced with a successor statute. As of the date this
chapter was adopted, the definition of "cannabis" was set forth in
California Business and Professions Code Section 26001(e). "Cannabis"
shall not include "industrial hemp," unless otherwise specified.
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.
means the tax due pursuant to this chapter for engaging in
a cannabis business in the City.
shall have the same meaning as the term defined in the Medicinal
and Adult-Use Cannabis Regulation and Safety Act, California Business
and Professions Code Section 26000, et seq., as amended from time
to time or replaced with a successor statute. As of the date this
chapter was adopted, the definition of "cannabis product" was set
forth in California Business and Professions Code Section 26001(h).
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.
means cultivation of cannabis or industrial hemp undertaken
in the course of conducting a cannabis business.
means a permit, license, certificate, or other approval 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.
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.
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.
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:
Such person or person's employee maintains a fixed place of
business within the City for the benefit or partial benefit of such
person;
Such person or person's employee owns or leases real property
within the City for business purposes;
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;
Such person or person's employee regularly conducts solicitation
of business within the City; or
Such person or person's employee performs work or renders services
in the City.
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The foregoing specified activities shall not be a limitation
on the meaning of "engaged in business." For activities not listed
above, the Tax Administrator shall have authority to determine if
a person is "engaged in business" as a cannabis business.
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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.
except as otherwise specifically provided, means, whether
designated as a sales price, royalty, rent, membership fee, ATM service
fee, delivery fee, slotting fee, any other fee, vaping room service
charge, 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. In the event the business is involved in a "non-arm's"
length transaction the gross receipts will be subject to the fair
market value using a methodology approved by the Tax Administrator.
However, the following shall be excluded from gross receipts:
Cash discounts were allowed and taken on sales;
Any tax required by law to be included in or added to the purchase
price and collected from the consumer or purchaser;
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;
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;
Cash value of sales, trades, or transactions between departments or between units of the same business located in the City of Claremont and if authorized by the Tax Administrator in writing in accordance with Section 4.20.140(B);
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;
Receipts of refundable deposits, except that such deposits when
forfeited and taken into income of the business shall not be excluded;
Payments made by the tax-reporting cannabis business (seller)
to a cannabis business (buyer) for the difference in the original
acquisition price and subsequent renegotiated or finalized selling
price of products or services sold to a specific end customer. This
type of transaction is referred to as a "Billback." The tax-reporting
cannabis business must provide supporting documentation to substantiate
the transaction in order to be eligible for an exemption.
Any business which sells industrial hemp and/or hemp products or offers services or activities related to industrial hemp or hemp products and/or which is not required to obtain a cannabis or industrial hemp permit or license from the City or the state for the purpose of cultivating, growing, drying, curing, manufacturing, processing, packaging, transporting, distributing, testing or selling of industrial hemp either wholesale or retail shall be exempt from the cannabis tax provided that such business does not generate more than 50% of their total gross receipts in the reporting period from the business from industrial hemp activities. However, the exemption may be amended by the City Council by resolution or ordinance pursuant to Section 4.20.050(B) to increase or decrease the percentage of the business's hemp and/or hemp products gross receipts reporting from zero to 100%. To the extent the gross receipts from the hemp activities do not meet the relevant percentage to be included, this exclusion shall reduce the gross receipts to zero for the sole purpose of calculating the cannabis tax.
means a crop that is limited to types of the plant Cannabis sativa L. having no more than 3/10 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. However, should the federal or state legislative body increase or decrease the percentage of tetrahydrocannabinol (THC) then this new limit shall be applicable to the tax unless modified by resolution or ordinance of the City Council pursuant to Section 4.20.310.
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.
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.
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.
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.
means a transaction that does not meet the definition of
an "arm's length transaction." In other words, the transaction is
not a sale entered into in good faith and that reflects fair market
value in the open market. One example of a non-arm's length transaction
would be when a cultivator sells cannabis goods to a cannabis distributor
at a sales price that is lower than what the same cultivator would
to other cannabis distributors, or which does not reflect the fair
market value in the open market.
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.
means a cultivation site that conducts only trimming, drying,
curing, grading, packaging, or labeling of cannabis, industrial hemp
and nonmanufactured cannabis products.
means a person as defined in this Section 4.20.040 who sells cannabis, cannabis products, hemp and/or hemp products at their place of business or by delivery to an end user or customer for use or consumption rather than to another person or business for resale.
means and includes any sale, exchange, or barter either as a retailer or wholesaler by a person as defined in this Section 4.20.040. 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.
means the State of California.
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.
means the City Manager of the City of Claremont or designee(s).
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 Department of Cannabis Control or other state
agency.
(22-09)
A.
Beginning
January 1, 2023, 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 person has been issued a commercial
cannabis business license, permit, or certificate 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 unlawfully
shall not constitute the City's approval or consent to such unlawful
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 cannabis 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 industrial hemp or industrial hemp products, including the initial rate of the tax on hemp or hemp products independent of other cannabis activities. Furthermore, the City Council may set varied rates using classifications, sub-classifications, a tiered rate structure, graduated rates, or any other means not prohibited by law. Notwithstanding the foregoing, in no event shall the City Council set the tax rate to be lower than which is specified in Section 4.20.050(C)(1), (2), (3), (4), (5), or repeal this tax.
C.
The
minimum rate of the cannabis business tax shall be calculated as follows:
1.
Every person engaged in commercial cannabis cultivation, including cultivation of industrial hemp, in the City of Claremont shall either pay an annual commercial cannabis business tax at the rates specified below in Section 4.20.050(C)(1)(a) or shall be subject to the annual minimum tax rate not to exceed 2% of gross receipts.
a.
Until amended and/or repealed by the voters except for those cannabis business that qualify under subsection (9) of the definition of "gross receipt" in Section 4.20.040 the minimum annual tax rate shall be:
i.
Five dollars per square foot of canopy space in a facility that uses
exclusively artificial lighting.
ii.
Four dollars per square foot of canopy space in a facility that uses a combination of natural and/or supplemental artificial lighting as "lighting" is defined in Section 4.20.040 of this chapter.
iii.
Two dollars per square foot of canopy space in a facility that uses
no artificial lighting.
iv.
One dollar ($1.00) per square foot of canopy space for any nursery
regardless of whether it is indoor, mixed light and/or outdoor.
2.
Every
person engaged in the operation of a testing laboratory for cannabis,
cannabis products, industrial hemp and/or industrial hemp products
shall be subject to the minimum tax rate of 1% of gross receipts.
3.
Every person engaged in retail sales of cannabis, cannabis products, industrial hemp, and/or industrial hemp products, including as a retailer (dispensary), or non-storefront retailer (retail delivery business), or microbusiness, or any other cannabis retail business that qualifies under subsections (1), (2), (3), (4), and/or (5) of the definition of "engaged in business as a cannabis business" in Section 4.20.040 shall be subject to the minimum tax rate of 4% of gross receipts.
4.
Every
person engaged in distribution of cannabis, cannabis products, industrial
hemp and/or industrial hemp products, shall be subject to the minimum
tax rate of 2% of gross receipts.
5.
Every person engaged in manufacturing or processing of cannabis, cannabis products, industrial hemp and/or industrial hemp products, and other type of cannabis business not described in Section 4.20.050(C)(1), (2), (3), or (4) shall be subject to the minimum tax rate of 2% of gross receipts.
D.
Through
January 1, 2024, the maximum rate of the cannabis business tax shall
be calculated as follows:
1.
Every person engaged in commercial cannabis cultivation, including cultivation of industrial hemp, in the City of Claremont shall either pay an annual commercial cannabis business tax at the rates specified below in Section 4.20.050(D)(1)(a) or shall be subject to the annual maximum tax rate not to exceed 3% of gross receipts, whichever is higher.
a.
Until amended and/or repealed by the voters except for those cannabis businesses that qualify under subsection (9) of the definition of "gross receipts" in Section 4.20.040 the maximum annual tax rate shall be:
i.
Ten dollars per square foot of canopy space in a facility that uses
exclusively artificial lighting.
ii.
Seven dollars per square foot of canopy space in a facility that uses a combination of natural and supplemental artificial lighting as "lighting" is defined in Section 4.20.040 of this chapter.
iii.
Four dollars per square foot of canopy space in a facility that uses
no artificial lighting.
iv.
Two dollars per square foot of canopy space for any nursery regardless
of whether it is indoor, mixed light and/or outdoor.
b.
On January 1, 2024 and on each January 1, thereafter, the maximum
annual tax rate specified in 4.20.050(D)(1)(a), shall increase by
the percentage increase in the Consumer Price Index ("CPI") for all
consumers in the Los Angeles-Long Beach-Anaheim area (or the closest
comparable area if that area is discontinued) published by the United
States Government Bureau of Labor Statistics. However, no CPI adjustment
resulting in a decrease of any tax imposed shall be made.
2.
Every
person engaged in the operation of a testing laboratory for cannabis,
cannabis products, industrial hemp and/or industrial hemp products
shall be subject to the maximum tax rate not to exceed 2% of gross
receipts.
3.
Every person engaged in retail sales of cannabis, cannabis products, industrial hemp, and/or industrial hemp products, including as a retailer (dispensary), or non-storefront retailer (retail delivery business), or microbusiness, or any other cannabis retail business that qualifies under subsections (1), (2), (3), (4), and/or (5) of the definition of "engaged in business as a cannabis business" in Section 4.20.040 shall be subject to the maximum tax rate not to exceed 7% of gross receipts.
4.
Every
person engaged in distribution of cannabis, cannabis products, industrial
hemp and/or industrial hemp products, shall be subject to the maximum
tax rate not to exceed 3% of gross receipts.
5.
Every person engaged in manufacturing or processing of cannabis, cannabis products, industrial hemp and/or industrial hemp products, and other type of cannabis business not described in Section 4.20.050(D)(1), (2), (3), or (4) shall be subject to the maximum tax rate not to exceed 4% of gross receipts.
E.
Persons
subject to the cannabis business tax shall register with the City
and pay the registration fee adopted by resolution or ordinance by
the City Council.
F.
If the
minimum and/or maximum cannabis business tax rates set forth in this
section are preempted by federal or state law, then the tax rate shall
automatically become the maximum rate authorized by federal or state
law that does not exceed the rate set forth in this section without
the need for an amendment to this chapter.
(22-09)
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 newly acquired business shall register with the
Tax Administrator within 30 calendar days of commencing operation
and shall annually renew such registration within 30 calendar days
of the business registration anniversary date of each year thereafter.
In registering, such persons shall furnish to the Tax Administrator
a sworn statement, upon a form prescribed by the Tax Administrator,
setting forth the following information:
B.
An annual
renewal fee in accordance with the current and approved City fee schedule
shall be presented with the sworn statement submitted under this chapter.
This fee shall not be considered a tax and may be adjusted annually
by resolution or ordinance of the City Council.
C.
The
cannabis business tax imposed by this chapter shall be paid, in arrears,
on a monthly basis. Each person owing a cannabis business tax shall
on or before the last day of the month following the close of each
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 the same date
that the tax statement is due.
D.
Upon
cessation of a cannabis business, tax statements and payments shall
be immediately due for all calendar months up through the calendar
month during which cessation occurred.
E.
In the
event that there is a change in ownership of any cannabis business:
1.
The
new owner is required to submit an updated registration form to the
Tax Administrator;
2.
The
new owner is subject to an audit by the Tax Administrator; and
3.
Unless otherwise provided by law, it is the joint and several liability of both the seller and buyer to remit any taxes, interest, penalties, and fees due up until the date of sale; otherwise, enforcement action may be taken pursuant to Section 4.20.160 of this chapter against both the seller and/or buyer in an amount to be determined by the Tax Administrator.
F.
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.
(22-09)
Whenever any payment, statement, report, request, or other communication
is due, it must be received by the Tax Administrator on or before
the 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.
(22-09)
Unless otherwise specifically provided under other provisions of this chapter, the taxes required to be paid pursuant to this chapter shall be deemed delinquent if not received by the Tax Administrator on or before the due date as specified in Sections 4.20.060 and/or 4.20.070.
(22-09)
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 chapter. Failure
to send such notice or bill shall not affect the validity of any tax
or penalty due under the provisions of this chapter.
(22-09)
A.
Any
person who fails or refuses to pay any cannabis business tax required
to be paid pursuant to this chapter 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 1% 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 1% per month on the unpaid tax
and on the unpaid penalties.
3.
Interest
shall be applied at the rate of 1% 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
chapter, and any other amount allowed under state law.
C.
The
Tax Administrator may, in the Tax Administrator's sole and absolute
discretion, waive the penalties imposed upon any person under this
section if:
1.
The
person requests a waiver of penalties by submitting a written request
for waiver to the Tax Administrator no later than December 31, of
the second calendar year following the calendar year in which the
tax became delinquent; and
2.
The
person provides evidence satisfactory to the Tax Administrator that
the failure to pay timely was due to circumstances beyond the control
of the person and occurred notwithstanding the exercise of ordinary
care and in the absence of willful neglect; and the person paid the
delinquent taxes, penalties, accrued interest, and fees owed prior
to applying to the Tax Administrator for a waiver.
D.
The waiver provisions specified in Section 4.20.100(C) shall not apply to interest accrued on the delinquent taxes and a waiver shall be granted only once during any 24 month period. The Tax Administrator's decision on a request for a waiver of penalties is final and conclusive and not subject to appeal under Section 4.20.150.
(22-09)
A.
No refund shall be made of any tax collected pursuant to this chapter, except as provided in Section 4.20.120.
B.
No refund
of any tax collected pursuant to this chapter shall be made because
of the discontinuation, dissolution, or other termination of a business.
C.
Any
person entitled to a refund of taxes paid pursuant to this chapter
may elect in writing to have such refund applied as a credit against
such person's cannabis business tax for the next calendar month.
(22-09)
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 chapter, it may be refunded to the claimant who paid the tax provided that a written claim for refund signed under the penalty of perjury is filed with the Tax Administrator within one year of the date the tax was originally due or paid, whichever came first. A person may only file a claim for refund if the person paid the tax. No person shall be entitled to a refund unless the person can support the claim by written records sufficient to show entitlement thereto. The Tax Administrator's decision on a claim for refund is final and conclusive and not subject to appeal under Section 4.20.150.
B.
The
Tax Administrator or any other City officer charged with the administration
of this chapter by the Tax Administrator, which may include a third
party, 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 requested by the Tax Administrator
to do so. The Tax Administrator may collect a fee adopted by resolution
by the City Council to pay for the cost of examination and audit should
the books and records be provided in a form insufficient to allow
the Tax Administrator to make a determination on the claim for refund.
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.
(22-09)
The provisions of this chapter 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 chapter 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.
(22-09)
A.
It shall
be the duty of the Tax Administrator to collect the taxes, interest,
penalties, and fees, and perform the duties required by this chapter.
B.
For
purposes of administration and enforcement of this chapter generally,
the Tax Administrator with the concurrence of the City Attorney, may
from time to time promulgate such administrative interpretations,
rules, and procedures consistent with the purpose, intent, and express
terms of this chapter 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 chapter;
3.
Receive
and record all taxes remitted to the City as provided in this chapter;
4.
Maintain
records of taxpayer reports and taxes collected pursuant to this chapter;
5.
Assess
penalties and interest to taxpayers pursuant to this chapter;
6.
Determine
amounts owed under and enforce collection pursuant to this chapter.
(22-09)
A taxpayer aggrieved by a decision of the Tax Administrator with respect to the amount of tax, interest, penalties, and fees, if any, due under this chapter may appeal only if a hearing was requested and attended pursuant to Section 4.20.250. An appeal may be made by filing a notice of appeal with the City Clerk within 21 calendar days of the serving or mailing of the Tax Administrator's decision of the amount due. Upon receipt of a timely notice of appeal, the City Clerk, or designee, shall fix a time and place for hearing such appeal with a hearing officer or other appointed body by the City Council. The City Clerk, or designee, shall give at least 10 calendar days' notice of the appeal hearing in writing to such taxpayer at the last known place of address. The hearing officer shall render a written decision that shall be served on the taxpayer at his, her, its, or their last known address. The decision of the hearing officer shall be final and conclusive. Any amount found to be due by the hearing officer shall be immediately due and payable upon the service of the decision. If no notice of appeal is filed within the time prescribed in this section, the Tax Administrator's decision with respect to the amount of tax, interest, penalties, and fees due is final and conclusive.
(22-09)
Any taxes, interest, penalties, and/or fees required to be paid
under the provisions of this chapter shall be deemed a debt owed to
the City. Any person owing money to the City under the provisions
of this chapter shall be liable in an action brought in the name of
the City for the recovery of such debt. The provisions of this chapter
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, interest, penalties, and/or
fees imposed by this chapter or the failure to comply with any of
the provisions of this chapter.
(22-09)
If a person subject to the tax is operating both within the
City 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.
(22-09)
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 chapter 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.
(22-09)
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 or
designees which may include a third party shall have the power to
inspect any location where commercial cannabis activity occurs and
to audit and examine all books and records (including, but not limited
to, bookkeeping records, access to METRC data, and/or point-of-sale
data, state and/or federal income tax returns, excise 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, or designees which may include a third party
shall have the power to inspect any space utilized for cannabis business
related activities, equipment or software, such as computers, software
systems, platforms, and databases (including METRC), and/or point
of sale systems, to include any keys or access codes for access to
and use of the equipment and/or software, 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 chapter to keep and preserve,
for a period of at least three years, or longer if required by any
state law or any other chapter of the Claremont Municipal Code 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 which may
include a third party shall have the right to inspect at all reasonable
times.
(22-09)
A.
Nothing
contained in this chapter shall be deemed to repeal, amend, be in
lieu of, replace or in any way affect any requirements for any commercial
cannabis license, City license, permit, or other certificate required
by, under or by virtue of any provision of any other 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
chapter of this code or any other ordinance or resolution of the City.
Any references made or contained in any other chapter of this code
to any licenses, permits, certificates, taxes, fees, or charges, or
to any schedule of license, permit, certificate, or fees, shall be
deemed to refer to the licenses, permits or certificates, and their
respective taxes, fees or charges, or schedule of fees, provided for
in other chapters of this code.
B.
A commercial cannabis license issued under the Claremont Municipal Code may be revoked, suspended or not renewed in the event that the business holding that license has failed to: (1) make a deposit required by the Tax Administrator pursuant to Section 4.20.060; or (2) timely pay all taxes, interest and penalties owed by that business under this chapter.
(22-09)
A.
The
payment of a cannabis business tax required by this chapter, 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 chapter 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.
(22-09)
If the Tax Administrator is not satisfied that any statement filed as required under the provisions of this chapter 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 Sections 4.20.240 and/or 4.20.250.
(22-09)
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 chapter at any time:
1.
If
the person has not filed a complete statement required under the provisions
of this chapter;
2.
If
the person has not paid the tax due under the provisions of this chapter;
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 chapter; or
4.
If
the Tax Administrator determines that the nonpayment of any cannabis
business tax due under this chapter 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 chapter 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 chapter and shall include the amount of any penalties or interest
accrued on each amount to the date of the notice of assessment. The
notice shall state that the person has 30 calendar days from the date
of the notice to make a written request for an informal hearing before
the Tax Administrator. The notice shall also state that if the person
fails to timely request an informal hearing within the time allowed,
the amount determined by the Tax Administrator is final and conclusive
and is immediately due and payable.
(22-09)
A notice of assessment shall be served upon the person either
by personal delivery, by overnight delivery, 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 chapter;
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 this section, 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.
(22-09)
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 an informal hearing on the assessment. If application for an informal hearing 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 an informal hearing, the Tax Administrator shall cause the matter to be set for an informal hearing before him or her, or designee, 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 informal hearing. Notice of such informal hearing shall be given by the Tax Administrator to the person requesting such informal hearing no later than five calendar days prior to such informal hearing. A hearing under this section shall be informal and need not follow any formal rules of evidence. 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 amount of tax, interest, penalties, and fees to be charged and shall give written notice of the decision to the person in the manner prescribed in Section 4.20.240 for giving notice of assessment. No appeal of a notice of assessment may be made under Section 4.20.150 unless an informal hearing is timely requested and the person attends the hearing. If the person fails to appear at the informal hearing, the amount due determined by the Tax Administrator in the notice of assessment is final and conclusive.
(22-09)
A.
If a
person is unable to comply with any tax requirement imposed under
this chapter due to a disaster impacting its cannabis business, the
person may notify the Tax Administrator of its inability to comply
and request relief from the tax requirement. For purposes of this
chapter, "disaster" means fire, flood, storm, tidal wave, earthquake,
or similar public calamity resulting in physical damage to real property,
whether or not resulting from natural causes. If a person is unable
to comply with any tax requirement imposed under this chapter due
to crop failure which impacts the cannabis business, the person must
notify the Tax Administrator of its inability to comply and request
relief from the tax requirement within five calendar days from when
the crop failure occurred in order to be considered eligible for such
tax relief.
B.
For
the purposes of this chapter, "crop failure" means a greatly diminished
crop yield relative to expectation, caused by the plants being damaged,
killed, or destroyed, or affected in some way that they fail to form
clones, mother plants, vegetative and/or flowering plants which must
be destroyed as a result of viruses, pathogens, pest, bugs, locust,
insects, mites, worms, fungi, bacteria, damaged water systems, plumbing,
flooding, excessive heat damage, power outage, or other similar cause
which results in physical damage to cannabis and/or hemp plants, cannabis
products and/or hemp products due to events outside the reasonable
control of the person. The person shall provide any information required
by the Tax Administrator, including, without limitation, why relief
is requested, the time period, which the relief is requested, the
reason relief is needed for the specific amount of time, access to
cultivation logs, and video surveillance camera footage for the time
period where the cannabis business has been impacted. The person agrees
to grant the Tax Administrator or designee access to the location
where the cannabis business has been impacted due to disaster or crop
failure and shall not destroy any evidence which may be deemed essential
to verify that such person qualifies for the tax relief.
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 or crop failure if such tax relief does not exceed $25,000. 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 or crop failure. The Tax Administrator may require that the cannabis business follow certain conditions to receive temporary relief from the cannabis business tax requirement. The Tax Administrator's decision on a request for relief and the conditions that may be imposed for relief under this section are final and conclusive and not subject to appeal under Section 4.20.150.
(22-09)
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 chapter or of any state law requiring the
payment of all taxes.
(22-09)
Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor. Any violation of the provisions of this chapter is unlawful and may be enforced pursuant to Claremont Municipal Code Chapters 1.12, 1.14, and/or 1.15.
(22-09)
If any provision of this chapter, 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 chapter or the
application of this chapter to any other person or circumstance and,
to that end, the provisions hereof are severable.
(22-09)
All remedies and penalties prescribed by this chapter, 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 chapter.
(22-09)
Except as set forth in this section, this chapter may be amended
or modified (but not repealed) by the City Council without a vote
of the people. However, as required by Chapter 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 chapter beyond the maximums set forth in this chapter. The people
of the City of Claremont 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 chapter, 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 chapter;
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
chapter; or
C.
The
collection of the tax imposed by this chapter even if the City had,
for some period of time, failed to collect the tax.
(22-09)
