Legislation and purpose. The purpose of this section is to implement N.J.S.A. 40:48I-1 and 24:6I-46 of the New Jersey Cannabis Regulatory Enforcement Assistance and Marketplace Modernization Act (CREAMMA) which authorizes a municipality to impose cannabis transfer and user taxes on cannabis for adult use. All terms herein shall have the same meaning as found in N.J.S.A. 24:6I-33, Section 3 of CREAMMA and Chapter 88 of the Code, unless otherwise stated.
Class 4 cannabis distributor license, for businesses involved in
transporting cannabis plants in bulk from on licensed cultivator to
another licensed cultivator, or cannabis items in bulk from any type
of licensed cannabis business to another;
Class 6 cannabis delivery license, for businesses providing courier
services for consumer purchases that are fulfilled by a licensed cannabis
retailer in order to make deliveries of the purchased items to a consumer,
and which service would include the ability of a consumer to make
a purchase directly through the cannabis delivery service which would
be presented by the delivery service for fulfillment by a retailer
and then delivered to a consumer.
A cannabis business is defined as any business that holds one or
more State of New Jersey issued license for Class 1 through Class
6 cannabis business and a vertically integrated cannabis business
is defined as any cannabis business that holds more than one cannabis
license.
Section 40a(1) of the Act permits a municipality to adopt an ordinance
imposing a transfer tax on the sale of cannabis or cannabis items
by a cannabis establishment that is located in the municipality on
receipts from the sale of cannabis by a cannabis cultivator to another
cannabis cultivator; receipts from the sale of cannabis items from
one cannabis establishment to another cannabis establishment; 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 and to set its own rate or rates, but in no case exceeding:
2% of the receipts from each sale by a cannabis cultivator; 2% of
the receipts from each sale by a cannabis manufacturer; 1% of the
receipts from each sale by a cannabis wholesaler; and 2% of the receipts
from each sale by a cannabis retailer.
A person 21 years of age or older who purchases, directly
or through a cannabis delivery service, acquires, owns, holds, or
uses cannabis items for personal use by a person 21 years of age or
older, but not for resale to others.
"Premises" or "licensed premises" includes the following
areas of a location licensed under P.L. 2021, c. 16 (N.J.S.A. 24:6I-31
et al.): all public and private enclosed areas at the location that
are used in the business operated at the location, including offices,
kitchens, rest rooms, and storerooms; all areas outside a building
that the Cannabis Regulatory Commission has specifically licensed
for the production, manufacturing, wholesaling, distributing, retail
sale, or delivery of cannabis items; and, for a location that the
Commission has specifically licensed for the production of cannabis
outside a building, the entire lot or parcel that the licensee owns,
leases, or has a right to occupy.
All other terms as defined in the New Jersey Cannabis Regulatory,
Enforcement Assistance, and Marketplace Modernization Act, also referenced
herein as the "Act" or "P.L. 2021, c. 16,"[1] are hereby incorporated herein by reference and shall
have the meanings set forth in the Act, as may be amended or superseded.
Collection of transfer tax. Such tax shall be collected or paid,
and remitted to the municipality by the cannabis establishment from
the cannabis establishment purchasing or receiving the cannabis or
cannabis item, or from the consumer at the point of sale, on behalf
of the municipality by the cannabis retailer selling the cannabis
item to that consumer. The transfer tax shall be stated, charged,
and shown separately on any sales slip, invoice, receipt, or other
statement or memorandum of the price paid or payable, or equivalent
value of the transfer, for the cannabis or cannabis item. No cannabis
establishment required to collect a transfer tax imposed hereunder
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 will be refunded
to the cannabis establishment or the consumer.
User tax. There shall also be imposed a user tax, at the equivalent transfer tax rates, on any concurrent license holder, as permitted by Section 33 of P.L. 2021, c. 16 (N.J.S.A. 24:6-46), operating more than one cannabis establishment. The user tax 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 Subsections A and B of this section, from the license holder's establishment that is located in the municipality to any of the other license holder's establishments, whether located in the municipality or another municipality. The value of each transfer or use of cannabis or cannabis items for user tax computation shall equal the statewide average retail price of an ounce of usable cannabis for consumer purchase, as determined by the Cannabis Regulatory Commission, less 10% or the third-party dispensary wholesale price, whichever is less.
Relationship to other taxes. A transfer tax or user tax imposed pursuant
to this section 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, P.L.
1966, c. 30 (N.J.S.A. 54:32B-1 et seq.). The transfer tax or user
tax shall be paid by the cannabis establishment purchasing or receiving
any cannabis or cannabis item from any cannabis cultivator or cannabis
manufacturer licensed by the municipality, and shall be collected
and remitted to the municipality by the cannabis establishment licensed
by the municipality. The transfer tax or user tax shall be stated,
charged, and shown separately on any sales slip, invoice, receipt,
or other statement or memorandum of the price paid or payable, or
equivalent value of the transfer, for the cannabis or cannabis item.
Tax liability. Every cannabis establishment required to collect a
transfer tax or user tax imposed pursuant to this article shall be
personally liable for the transfer tax or user tax imposed, collected,
or required to be collected under this section. Any cannabis establishment
shall have the same right with respect to collecting the transfer
tax or user tax from another cannabis establishment or the consumer
as if the transfer tax or user 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 transfer
tax or user tax was a part of the purchase price of the cannabis or
cannabis item, or equivalent value of the transfer of the cannabis
or cannabis item, and payable at the same time; provided, however,
that the Chief Financial Officer of the Township which imposes the
transfer tax or user tax shall be joined as a party in any action
or proceeding brought to collect the transfer tax or user tax.
Unless otherwise determined by the Township Council, the Chief Financial Officer is charged with the administration and enforcement of the provisions of this chapter, and is empowered to prescribe, adopt, promulgate and enforce rules and regulations relating to any matter pertaining to the administration and enforcement of this chapter, including provisions for the reexamination and corrections of declarations and statements, and of payments alleged or found to be incorrect, or as to which an overpayment is claimed or found to have occurred, and to prescribe forms necessary for the administration of this chapter. The Township Council may determine at any time, in its sole discretion, to retain an outside third-party consultant (the "outside consultant") to exercise all of duties and responsibilities of the Chief Financial Officer as set forth above, with the exception of the power of enforcement, levying of fines and penalties and entering into agreements with the State of New Jersey. In the event that the Township Council retains such an outside consultant, the fee schedule for the outside consultant shall be presented, for informational purposes only, to the cannabis business before such audit and other work is undertaken. The cannabis business shall be responsible for reimbursement to the Township of the fees incurred by the Township to the outside consultant for services rendered in its examination of the business's accounts for the determination of tax to be paid. A copy of the invoice shall be sent to the cannabis business by the municipality after the municipality is billed for the outside consultant's work. The cannabis business shall reimburse the municipality for the outside consultant's fees and expenses within 60 days thereafter. Failure to timely reimburse the municipality shall invoke the § 114-60, Enforcement and penalties, of the Township Code. Should a cannabis business fail or refuse to provided adequate information to the Chief Financial Officer or the outside consultant to determine the amount of tax due, the Chief Financial Officer or the outside consultant may use information provided from other sources (i.e., the NJ Cannabis Regulatory Commission or NJ Department of Treasury) to determine the amount of tax liability, and the licensee shall be subject to the penalties set forth in § 114-60, Enforcement and penalties, of the Township Code.
It shall be the duty of the Chief Financial Officer or the outside
consultant, as applicable, to collect and receive the taxes, fines,
and penalties imposed by this article. It shall also be the duty of
the Chief Financial Officer or the outside consultant, as applicable,
to keep a record showing the date of such receipt. The Chief Financial
Officer is authorized to enter into agreements with the State of New
Jersey to obtain information to facilitate administration of the taxes.
The Chief Financial Officer is authorized to issue a ruling upon written
request of a taxpayer or upon his or her own volition.
The Chief Financial Officer or the outside consultant, as applicable,
is hereby authorized to examine the books, papers and records of any
taxpayer to verify the accuracy of any declaration or financial statement,
or if no declaration or financial statement was filed, to ascertain
the tax due. Every taxpayer is hereby directed and required to give
to the Chief Financial Officer, or to the outside consultant, as applicable,
the means, facilities and opportunity for such examinations and investigations,
as are hereby authorized or otherwise permitted by law.
In the event that the transfer tax or user tax imposed pursuant to
this article is not paid when due by a cannabis establishment, the
unpaid balance, and any interest accruing thereon, shall be a lien
on the parcel of real property comprising the cannabis establishment's
premises in the same manner as all other unpaid municipal taxes, fees,
or other charges. 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 Chief Financial Officer or outside consultant, as applicable,
shall file in the office of its tax collector a statement showing
the amount and due date of the unpaid balance 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.
Returns and records filed by a licensee, and the records and files
of the Chief Financial Officer or the outside consultant, as applicable,
respecting the administration of the Transfer and User Tax, shall
be considered confidential and privileged and neither the Chief Financial
Officer nor any employee or outside consultant engaged in the administration
thereof or charged with the custody of any such records or files,
nor any former officer or employee, nor any person who may have secured
information therefrom shall divulge, disclose, use for their own personal
advantage, or examine for any reason other than a reason necessitated
by the performance of official duties any information obtained from
the said returns, records or files or from any examination or inspection
of the premises or property of any person, or to an officer of a public
entity for a reason authorized by N.J.S.A. 54:50-9. Neither the Chief
Financial Officer nor any employee or outside consultant engaged in
such administration or charged with the custody of any such returns,
records or files shall be required to produce any of them for the
inspection of any person or for use in any action or proceeding except
when the records or files or the facts shown thereby are directly
involved in an action or proceeding to collect or challenge the assessment
of transfer or user taxes hereunder, or where the determination of
the action or proceeding will affect the validity or amount of the
claim of the Township hereunder, or in any lawful proceeding for the
investigation and prosecution of any violation of this Article or
of the criminal provisions of the State Uniform Tax Procedure Law[1] or of any state tax law, or where production is required
pursuant to the New Jersey Open Public Records Act (N.J.S.A. 47:1A-1
et seq.) or the Common Law, or the New Jersey Cannabis Regulatory,
Enforcement Assistance, and Marketplace Modernization Act (P.L. 2021,
c. 16)[2] or other applicable law.
Requirement to keep records. Taxpayers liable for the transfer and/or
user tax are required to keep such records as will enable the filing
of true and accurate financial statements of the tax and such records
shall be preserved for a period of not less than three years from
the filing date or due date, whichever is later, in order to enable
the Chief Financial Officer or any agent designated by him or her
to verify the correctness of the declarations or financial statements
filed. If records are not available in the Township to support the
financial statements which were filed or which should have been filed,
the taxpayer will be required to make them available to the Chief
Financial Officer either by producing them at a location in the municipality
or by paying for the expenses incurred by the Chief Financial Officer
or his or her agent in traveling to the place where the records are
regularly kept.
Tax Payments and financial statements. All cannabis establishments
operating in the Township shall be required to file a transfer and/or
user tax statement with the Chief Financial Officer to report their
sales during each calendar quarter and the amount of tax in accordance
with the provisions of this chapter. Financial statements shall be
filed and payments of tax imposed for the preceding calendar quarter
shall be made on or before the last day of April, July, October, and
January, respectively. A taxpayer who has overpaid the transfer tax,
or who believes it is not liable for the tax, may file a written request
on an amended financial statement with the Chief Financial Officer
for a refund or a credit of the tax.