Every person who sells marijuana or marijuana-infused products in the City of Klamath Falls is exercising a taxable privilege. The purpose of this article (Marijuana Tax) is to impose a tax upon the retail sale of marijuana and marijuana-infused products.
(Ord. 14-09, 2014)
A. 
Marijuana sold for medical purposes through medical marijuana dispensaries authorized by the State of Oregon to dispense medical marijuana shall be exempt from the tax.
B. 
Dispensaries who sell marijuana for medical and recreational purposes shall comply with the record keeping requirements as required by this article (Marijuana Tax). In addition, such dispensaries shall maintain records of marijuana sold for medical purposes.
C. 
Dispensaries who sell only marijuana for medical purposes shall not be required to comply with the record keeping requirements of this article (Marijuana Tax).
(Ord. 14-09, 2014)
When not clearly indicated by context, the following words and phrases as used in this article shall have the following meanings:
Director.
The Support Services Director or the Director's designee.
Sale.
The retail acquisition or furnishing for consideration by any person of marijuana within the City and does not include the acquisition or furnishing of marijuana by a grower or processor to a seller.
Seller.
Any person who is required to be licensed or has been licensed by the State of Oregon to provide marijuana or marijuana-infused products to purchase for money, credit, property or other consideration.
Tax.
Either the tax payable by the seller or the aggregate amount of taxes due from a seller during the period for which the seller is required to report collections under this article (Marijuana Tax).
Taxpayer.
Any person obligated to account to the Director for taxes collected or to be collected, or from whom a tax is due, under the terms of this article (Marijuana Tax).
(Ord. 14-09, 2014; Ord. 18-12, 2018)
A. 
A three percent tax shall be imposed on marijuana retail sales in the City.
B. 
Every seller exercising the taxable privilege of selling marijuana and marijuana-infused products shall pay the tax based upon the total sale amount of recreational marijuana and marijuana-infused products.
(Ord. 14-09, 2014; Ord. 18-12, 2018)
The following deductions shall be allowed against sales received by the seller providing marijuana:
A. 
Refunds of sales actually returned to any purchaser; and
B. 
Any adjustments in sales which amount to a refund to a purchaser, providing such adjustment pertains to the actual sale of marijuana or marijuana-infused products and does not include any adjustments for other services furnished by a seller.
(Ord. 14-09, 2014)
A. 
Every seller shall, on or before the last day of the month following the end of each calendar quarter (in the months of April, July, October, and January), make a return to the Director, on forms provided by the City, specifying the total sales subject to marijuana taxation and the amount of tax collected. The Director may establish shorter reporting periods for any seller if the seller or Director deems it necessary in order to insure collection of the tax and the Director may require further information in the return relevant to the payment of the tax. A return shall not be considered filed until it is actually received by the Director.
B. 
At the time the return is filed, the full amount of the tax collected shall be remitted to the Director.
C. 
Non-designated payments shall be applied in the order of the oldest liability first, with the payment credited first toward any accrued penalty then to interest, then to the underlying tax until the payment is exhausted. Returns and payments are due immediately upon cessation of business for any reason. All taxes collected by sellers pursuant to this article (Marijuana Tax) shall be held in trust for the account of the City, until payment is made to the Director. A separate trust bank account is not required in order to comply with this provision.
D. 
Every seller required to remit the tax imposed in this article (Marijuana Tax) shall be entitled to retain two percent of all taxes due to defray the costs of bookkeeping and remittance.
E. 
Every seller must keep and preserve in an accounting format established by the Director, records of all sales made by the dispensary and such other books or accounts as may be required by the Director. Every seller must keep and preserve for a period of three years all such books, invoices and other records. The Director shall have the right to inspect all such records at all reasonable times.
(Ord. 14-09, 2014; Ord. 18-12, 2018)
A. 
Any seller who fails to remit any portion of any tax imposed by this article (Marijuana Tax) within the time required shall pay a penalty of 10% of the amount of the tax, in addition to the amount of the tax.
B. 
Any seller who fails to remit any delinquent remittance within 60 days of the date the tax became delinquent, shall pay a second delinquency penalty of 10% of the amount of the tax.
C. 
If the Director determines that the nonpayment of any remittance due is due to fraud, a penalty of 25% of the amount of the tax shall be added.
D. 
Any seller who fails to remit any tax shall pay interest at the rate of one percent per month or a fraction thereof on the amount of the tax from the date on which the remittance first became delinquent until paid.
E. 
Every penalty imposed, and such interest as accrues shall become part of the tax required to be paid.
(Ord. 14-09, 2014)
If any seller should fail to report the tax required, the Director shall estimate the tax due based on facts and information available. When the Director estimates the tax, the Director shall give a notice of the amount assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the seller so assessed at the last known place of address. Such seller may make an appeal of such determination as provided in Section 7.217 (Appeal). If no appeal is filed, the Director's determination is final and the amount thereby is immediately due and payable.
(Ord. 14-09, 2014)
Any seller aggrieved by any decision of the Director with respect to the amount of the tax, interest and penalties may appeal pursuant to Section 1.025 (Uniform Appeal and Hearing Procedure), except that a hearings officer shall be appointed by the City Council to hear the appeal. The hearings officer shall hear and consider any records and evidence presented bearing upon the Director's determination of amount due, and make findings affirming, reversing or modifying the determination. The findings of the hearings officer shall be final and conclusive, and shall be served upon the appellant in the manner prescribed above for service of notice of the hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.
(Ord. 14-09, 2014)
A. 
Whenever the amount of the tax, interest or penalty was overpaid or has been erroneously collected or received by the City under this article (Marijuana Tax), it may be refunded as provided in subsection B, provided a claim in writing, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the Director within one year of the date of payment. The claim shall be on forms furnished by the Director.
B. 
The Director shall have 20 calendar days from the date of receipt of a claim to review the claim and make a determination in writing as to the validity of the claim. The Director shall notify the claimant in writing of the Director's determination.
C. 
No refund shall be paid under the provisions of this section unless the claimant established the right by written records showing entitlement to such refund and the Director acknowledged the validity of the claim.
(Ord. 14-09, 2014)
Any tax required to be paid by any seller under the provisions of this article (Marijuana Tax) shall be deemed a debt. The City may turn over any delinquent tax account to a collection agency and add collection fees.
(Ord. 14-09, 2014)
A. 
Any person who is subject to this article (Marijuana Tax) shall not:
1. 
Fail or refuse to comply as required;
2. 
Fail or refuse to furnish any return required to be made;
3. 
Fail or refuse to permit inspection of records;
4. 
Fail or refuse to furnish a supplemental return or other data required by the Director;
5. 
Render a false or fraudulent return or claim; or
6. 
Fail, refuse or neglect to remit the tax to the City by the due date.
B. 
Violation of subsection (A)(1) through (4) and (6) shall be punished by a fine not more than $1,000.00.
C. 
Violation of subsection (A)(5) shall be punished by a fine of not more than $10,000.00, or by imprisonment for a period not to exceed six months, or by both such fine and imprisonment.
D. 
Violation of subsection A shall result in the forfeiture of the fee set out in Section 7.210(D).
E. 
The remedies provided by this section are not exclusive and shall not prevent the City from exercising any other remedy available under the law, nor shall the provisions of this article (Marijuana Tax) prohibit or restrict the City or other appropriate prosecutor from pursuing criminal charges under State law or City ordinance.
(Ord. 14-09, 2014; Ord. 18-12, 2018)
Except as otherwise required by law, it is unlawful for the City, an officer, employee or agent to divulge, release or make known in any manner any financial information submitted or disclosed to the City under the terms of this article (Marijuana Tax). Nothing in this section shall prohibit:
A. 
The disclosure of the names and addresses of any person who is operating a licensed establishment from which marijuana is sold or provided; or
B. 
The disclosure of general statistics in a form which would not reveal an individual seller's financial information; or
C. 
Presentation of evidence to the court, or other tribunal having jurisdiction in prosecution of any criminal or civil claim by the Director or an appeal from the Director for amount due the City under this article (Marijuana Tax); or
D. 
The disclosure of information when such disclosure of conditionally exempt information is ordered under public records law procedures; or
E. 
The disclosure of records related to a business' failure to report and remit the tax with the report or tax that is in arrears for over six months or the tax exceeds $5,000.00. The City Council expressly finds and determines that the public interest in disclosure of such records outweighs the interest in confidentiality under ORS 192.345(5).
(Ord. 14-09, 2014; Ord. 18-12, 2018)
The City may examine or may cause to be examined by an agent or representative designated by the City for that purpose, any books, papers, records, or memoranda, including copies of seller's State and Federal income tax returns, bearing upon the matter of the seller's tax return. All books, invoices, accounts and other records shall be made available within the City limits and open at any time during regular business hours for examination by the Director or an authorized agent of the Director. If any taxpayer refuses to voluntarily furnish any of the foregoing information when requested, the Director may immediately seek a subpoena from the Klamath Falls Municipal Court to require that the taxpayer or a representative of the taxpayer attend a hearing or produce any such books, accounts and records for examination.
(Ord. 14-09, 2014)
The Director is authorized to prescribe forms and promulgate rules and regulations to administer this article (Marijuana Tax).
(Ord. 14-09, 2014; Ord. 18-12, 2018)
A. 
Pursuant to ORS 305.620, the Director may enter into an intergovernmental agreement with the Oregon Department of Revenue to collect the three percent tax imposed under Section 7.205. The terms and conditions of the intergovernmental agreement shall apply in lieu of this article.
B. 
If the Director enters into an intergovernmental agreement pursuant to this section, the provisions of ORS 475B.710, ORS 475B.715, and ORS 475B.755 shall apply to every marijuana retailer subject to this article.
C. 
In the event of any conflict between the provisions of this article and the provisions of the intergovernmental agreement, the provisions of the intergovernmental agreement shall apply.
(Ord. 18-12, 2018)