This chapter shall be known as the "Cannabis Business Tax Ordinance."
(Ord. 1828 § 1, 2018)
The cannabis business tax is a general tax enacted solely for unrestricted general revenue purposes for the city and not for specific purposes. All the proceeds from the tax imposed by this chapter shall be placed in the city's general fund and can be used for unrestricted general revenue purposes.
(Ord. 1828 § 1, 2018)
The purpose of this chapter is to:
A.
Impose a tax on the privilege of cultivating, manufacturing, processing, storing, laboratory testing, labeling, packaging, transporting, distributing, delivering, or sale of commercial cannabis and cannabis products and accessories by cannabis businesses in the City of Oroville.
C.
Specify the type of tax and rate of tax to be levied and the method of collection.
D.
Comply with all requirements for imposition of a general tax, such tax to become operative only if submitted to the electorate and approved by a majority vote of the voters voting in an election on the issue.
E.
Specify the cannabis business tax is not a sale and use tax, a tax upon income, or a tax upon real property.
(Ord. 1828 § 1, 2018)
The intent of this chapter is to levy a tax on all cannabis businesses that operate in the city. 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.
(Ord. 1828 § 1, 2018)
For the purposes of this chapter, the following definitions apply:
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 following calendar year.
means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code and is not limited to medicinal cannabis. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis" does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
means any commercial business activity relating to cannabis, including, but not limited to, cultivating, manufacturing, processing, storing, laboratory testing, labeling, packaging, transporting, distributing, delivering or sale of adult-use and medicinal cannabis or cannabis product, except as related to Business and Professions Code Section 19319, and as they may be amended or Health and Safety Code Sections 11362.1 through 11362.45 and as they may be amended.
means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
means the procurement, sale, and transport of cannabis or cannabis products between entities licensed pursuant to the Medical and Adult Use of Cannabis Regulation and Safety Act and any subsequent State of California legislation regarding the same.
means any aspect of the cannabis extraction and infusion processes, including processing, preparing, holding, storing, packaging, or labeling of cannabis products. Cannabis manufacturing also includes any processing, preparing, holding, or storing of components and ingredients.
means a facility that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis.
means raw cannabis that has undergone a process whereby the raw agricultural product has been transformed into a concentrate, an edible product, or a topical product. "Cannabis product" also means marijuana products as defined by Section 11018.1 of the California Health and Safety Code and is not limited to medicinal cannabis products.
means business, other than a business all of whose sales constitute cannabis distribution, where medicinal and adult-use cannabis, cannabis products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination for sale, including an establishment that delivers cannabis or cannabis products as part of a sale.
means a facility, entity, or site that offers or performs tests of cannabis or cannabis products, and that is accredited as operating to ISO standard 17025 by an accrediting body and registered with the State Department of Public Health.
means a person involved in distribution as limited by Title 16 California Code of Regulations Section 5315, as may be amended.
means the commencing, conducting, operating, managing or carrying on of a cannabis business and the exercise of corporate or franchise powers, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the incorporated area of the city or coming into the incorporated area of 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 incorporated area of the city for the benefit or partial benefit of such person;
Such person or person's employee owns or leases real property within the incorporated area of the city for business purposes;
Such person or person's employee regularly maintains a stock of tangible personal property in the incorporated area of the city for sale in the ordinary course of business;
Such person or person's employee regularly conducts solicitation of business within the incorporated area of the city;
Such person or person's employee performs work or renders services in the incorporated area of the city; and
Such person or person's employee utilizes the streets within the incorporated area of the city in connection with the operation of motor vehicles for business purposes.
The foregoing specified activities shall not be a limitation on the meaning of "engaged in business." |
except as otherwise specifically provided, means the total amount actually received or receivable from all sales; the total amount or compensation actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise; discounts, rents, royalties, fees, commissions, dividends, and gains realized from trading in stocks or bonds, any excise tax included within the purchase price however designated. Included in "gross receipts" shall be all receipts, cash, credits and property of any kind or nature, 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, or losses or other expenses whatsoever, except that the following shall be excluded therefrom:
Cash discounts where allowed and taken on sales;
Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as gross receipts;
Sales tax required by law to be 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 from investments where the holder of the investment receives only interest and/or dividends, royalties, annuities and gains from the sale or exchange of stock or securities solely for a person's own account, not derived in the ordinary course of a business;
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 units of the same business;
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;
Transactions between a partnership and its partners;
Receipts from services or sales in transactions between affiliated corporations. An affiliated corporation is a corporation:
The voting and non-voting stock of which is owned at least 80% by such other corporation with which such transaction is had, or
Which owns at least 80% of the voting and non-voting stock of such other corporation, or
At least 80% of the voting and non-voting stock of which is owned by a common parent corporation which also has such ownership of the corporation with which such transaction is had;
Transactions between a limited liability company and its member(s), provided the limited liability company has elected to file as a Subchapter K entity under the Internal Revenue Code and that such transaction(s) shall be treated the same as between a partnership and its partner(s) as specified in subsection 9 herein;
Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of $1.00;
Amounts collected for others where the business is acting as an agent or trustee and to the extent that such amounts are paid to those for whom collected. These agents or trustees must provide the finance department with the names and the addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustees.
includes any 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, and the plural as well as the singular.
means and includes any sale, exchange, or barter.
means the State of California.
"license," or "registration" means a state license issued pursuant to California Business and Professions Code Section 26000 et seq., or other applicable state law.
means the finance director of the City of Oroville or designee.
(Ord. 1828 § 1, 2018)
A.
Tax on Cannabis Businesses by Gross Receipts. Every person who is engaged in a cannabis business in the City of Oroville shall pay to the city an annual cannabis business tax at a rate of up to 10% of gross receipts per year. The initial rates established as follows should the city allow such activity:
B.
The city council may at its discretion, at any time by resolution, increase or decrease the rates for the different categories of cannabis business. However, in no event may the city council set any adjusted rate that exceeds the maximum rate. The maximum rate for all commercial cannabis businesses shall be set at 10% of gross receipts.
C.
Revenue from the cannabis business tax can be spent for unrestricted general revenue purposes.
(Ord. 1828 § 1, 2018)
A.
The cannabis business tax imposed by this chapter is an annual tax payable in monthly installments. The tax year for purposes of this chapter runs from January 1 through December 31 of each calendar year. No later than the last day of each month, each taxpayer shall file with the tax administrator a statement of the tax owed for that month and the basis for calculating that tax. The tax shall be due and payable on the same date that the statement for the calendar month is due.
B.
If the due date would fall on a 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.
C.
The monthly installment shall be no less than the amount calculated by applying the relevant tax rate to the paid based on the actual gross receipts for the month.
D.
No later than January 31 of each year, each taxpayer shall file with the city their final tax statement with respect to all commercial cannabis business activities during the prior calendar year. If the total of all installment payments made for the tax year is less than the final annual tax due, the difference shall be remitted to the city along with the tax statement. If the total of all installment payments exceeds the final annual tax due, then the excess payment shall be applied as a credit against the subsequent year's installment payments.
(Ord. 1828 § 1, 2018)
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 Section 3.40.070.
(Ord. 1828 § 1, 2018)
A.
Any person who fails or refuses to pay the cannabis business tax 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 one percent 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 one percent per month on the unpaid tax and on the unpaid penalties.
3.
Interest shall be applied at the rate of one percent 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 section, and any other amount allowed under state law.
(Ord. 1828 § 1, 2018)
Any taxes, 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 section 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, penalties and/or fees imposed by this chapter or the failure to comply with any of the provisions of this chapter.
(Ord. 1828 § 1, 2018)
Any taxpayer aggrieved by any decision of the tax administrator with respect to the amount of tax, interest, penalties and fees, if any, due under this chapter may appeal to the city council by filing a notice of appeal with the city clerk within 30 calendar days of the serving or mailing of the determination of tax due. The city clerk, or designee, shall fix a time and place for hearing such appeal, and the city clerk, or designee, shall give notice in writing to such operator at the last known place of address. The finding of the city council shall be final and conclusive and shall be served upon the appellant in the manner prescribed by this chapter for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.
(Ord. 1828 § 1, 2018)
A.
Whenever the amount of any cannabis business tax, delinquency amount 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 is filed with the treasurer-tax collector within one year of the date the tax was originally due and payable.
B.
The tax administrator, designee or any other city officer charged with the administration of this chapter 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 request by the tax administrator to do so.
C.
In the event that the cannabis operations tax was erroneously paid, and the error is attributable to the city, the city shall refund the amount of tax erroneously paid up to one year from when the error was identified.
D.
No refund of any tax collected pursuant to this chapter shall be made because of the discontinuation, dissolution, or other termination of a business or operation.
(Ord. 1828 § 1, 2018)
A.
The tax administrator is authorized to collect the taxes, delinquency amounts, interest, penalties and fees, and perform the duties required by this chapter.
B.
The tax administrator shall promulgate administrative interpretations, rules, and procedures consistent with the purpose, intent, and express terms of this chapter to ensure the efficient and timely collection of the cannabis business tax.
C.
The tax administrator may take such administrative actions as needed to administer the tax, including, but not limited to:
1.
Provide to all cannabis business tax payers 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 by this chapter;
4.
Maintain records of taxpayer reports and taxes collected pursuant to this chapter;
5.
Assess delinquency amounts and interest to taxpayers pursuant to this chapter; and
6.
Determine amounts owed and enforce collection pursuant to this chapter.
(Ord. 1828 § 1, 2018)
A.
Any taxpayer aggrieved by any decision of the tax administrator with respect to the amount of tax, interest, penalties and fees, if any, due under this chapter may appeal to the city council by filing a notice of appeal with the city clerk within 30 calendar days of the serving or mailing of the determination of tax due. The city clerk, or designee, shall fix a time and place for hearing such appeal, and the city clerk, or designee, shall give notice in writing to such operator at the last known place of address. The finding of the city council shall be final and conclusive and shall be served upon the appellant in the manner prescribed by this chapter for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of the notice.
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 3 years, 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 shall have the right to inspect at all reasonable times.
(Ord. 1828 § 1, 2018)
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. 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.
(Ord. 1828 § 1, 2018)
If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the remainder of the chapter and the application of such provisions to other persons or circumstances shall not be affected thereby.
(Ord. 1828 § 1, 2018)
This chapter may be repealed or amended by the city council without a vote of the people to the extent allowed by law. However, as required by Article XIII C of the California Constitution, voter approval is required for any amendment that would increase the rate of any tax levied pursuant to this chapter above the maximum rates established by this chapter. The people of the City of Oroville affirm that the following actions shall not constitute an increase of a tax:
A.
Any restoration or adjustment of the rate of the tax to a rate that is no higher than that maximum rate set by this chapter, if the city council has acted to reduce the rate of the tax; or
B.
An action that interprets or clarifies the methodology of the tax, or any definition applicable to the tax, so long as interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the language 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.
(Ord. 1828 § 1, 2018)