Chapter 3.47
CANNABIS INDUSTRY TAX
Sections:
3.47.050 Payment of tax does not authorize unlawful business or activity.
3.47.060 Modification, repeal, or amendment.
3.47.010 Imposition of tax.
(A) Tax on Commercial Cannabis Cultivation.
(1) Every person engaged in commercial cannabis cultivation in the City limits of the City of Mt. Shasta shall pay a monthly commercial cannabis business tax at a rate of up to $0.35 per dry-weight ounce of cannabis flower that enter the commercial market, up to $0.10 per dry-weight ounce of cannabis leaves that enter the commercial market, and up to $0.05 per ounce of fresh cannabis plant. Fresh cannabis plant product must be weighed within two hours of harvesting.
(2) Notwithstanding the maximum tax rate established by this chapter, the City Council may at its discretion, at any time by resolution, implement a lower tax rate for all persons engaged in commercial cannabis cultivation within the City of Mt. Shasta City limits for different categories of commercial cannabis cultivation including medical or nonmedical use, subject to the maximum rate established in subsection (A)(1) of this section. The City Council may, by resolution, also increase any such tax rate from time to time, not to exceed the maximum tax rate established in subsection (A)(1) of this section.
(3) Pursuant to subsection (A) of this section, the cannabis industry tax on commercial cannabis cultivation is to be initially imposed as follows: a tax rate of $0.30 per dry-weight ounce cannabis flower, $0.08 per dry-weight ounce cannabis leaves, and $0.02 per ounce of fresh cannabis plant.
(B) Tax on Commercial Cannabis Manufacturing.
(1) Every person engaged in commercial cannabis manufacturing in the City limits of the City of Mt. Shasta shall pay a monthly commercial cannabis business tax at a rate of up to $5.00 per square foot of manufacturing area.
(2) Notwithstanding the maximum tax rate established by this chapter, the City Council may at its discretion, at any time by resolution, implement a lower tax rate for all persons engaged in commercial cannabis manufacturing within the City of Mt. Shasta City limits subject to the maximum rate established in subsection (B)(1) of this section. The City Council may, by resolution, also increase any such tax rate from time to time, not to exceed the maximum tax rate established in subsection (B)(1) of this section.
(3) Pursuant to subsection (B) of this section, the commercial cannabis industry tax on commercial cannabis manufacturing is to be imposed at $1.00 per square foot of manufacturing area.
(C) Tax on All Other Commercial Cannabis Business.
(1) Every person engaged in operating a commercial cannabis business, other than commercial cannabis cultivation or manufacturing, including but not limited to as a distributor, distribution facility, testing facility, transporter, nursery, retail operation, or engaging in delivery of cannabis in the City limits of the City of Mt. Shasta shall pay a monthly commercial cannabis business tax at a rate of up to five percent of gross receipts per month.
(2) Notwithstanding the maximum tax rate established by this chapter, the City Council may at its discretion, at any time by resolution, implement a lower tax rate for all persons engaged in commercial cannabis manufacturing within the City of Mt. Shasta City limits subject to the maximum rate established in subsection (C)(1) of this section. The City Council may, by resolution, also increase any such tax rate from time to time, not to exceed the maximum tax rate established in subsection (C)(1) of this section.
(3) Pursuant to subsection (C) of this section, the commercial cannabis industry tax on every person engaged in commercial cannabis business, including but not limited to as a distributor, distribution facility, testing facility, transporter, nursery, retail operation, or engaging in delivery of cannabis is to be imposed at the following rates: cannabis nursery three percent, retail operation three percent, distributor zero percent, testing facility zero percent, and transporter zero percent. (Ord. CCO-18-06 § 3, 2018)
3.47.020 Definitions.
(A) “Business tax” or “cannabis industry tax” means the tax due pursuant to this chapter for engaging in lawful commercial cannabis business in the City of Mt. Shasta.
(B) “Cannabis” means all parts of the plant 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. For the purposes of this section the terms “cannabis” and “marijuana” shall have the same meaning.
(C) “Cannabis industry” or “commercial cannabis business” means any commercial business activity relating to cannabis, including but not limited to cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, delivery, or sale of cannabis, medical cannabis or a cannabis or medical cannabis product, except as related Cal. Bus. and Prof. Code § 19319, and as they may be amended or Cal. Health and Safety Code §§ 11362.1 through 11362.45 and as they may be amended.
(D) “Commercial cannabis cultivation” means the planting, growing, harvesting, drying, processing, or storage of one or more cannabis plants or any part thereof and as defined in Cal. Bus. and Prof. Code § 19300.5(k) and or a cannabis nursery as defined in Cal. Bus. and Prof. Code § 19300.5(ag).
(E) “Commercial cannabis manufacturing” means the production, preparation, propagation, or compounding of manufactured cannabis or cannabis products, directly or indirectly.
(F) “Gross receipts” means the total amount actually received or receivable from all cannabis 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 is 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. 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 the material used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever.
(G) “Manufacturing area” means the entire premises utilized for production, preparation, propagation, storage, or compounding of manufactured cannabis or cannabis products, directly or indirectly, not deducting for unutilized portions of the premises.
(H) “Retail operation” means a premises where cannabis, cannabis products, devices, or services for the use of nonmedical and medical products are offered, whether individually or in any combination, for retail sale, including an establishment that delivers, pursuant to relevant California State regulations, cannabis and cannabis products as part of a retail sale. For the purpose of this section the terms “cannabis dispensary,” “cannabis collective,” “cannabis cooperative,” and “cannabis retail facility” shall have the same meaning. (Ord. CCO-18-06 § 3, 2018)
3.47.030 Payment obligation.
Any entity subject to this chapter must pay the full tax imposed by this chapter regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in this code, except as required by California and Federal law. Failure to pay the taxes required by this section within 30 days after the due date shall be subject to the following penalties, interest charges, and assessments:
(A) A penalty in the sum equal to 10 percent of the total amount due; and
(B) If the tax remains unpaid, an additional penalty equal to 10 percent shall be added on the first day of each calendar month following the initial penalty. (Ord. CCO-18-06 § 3, 2018)
3.47.040 Remittance.
The taxes imposed by this chapter shall be remitted directly to the City monthly as set forth in this chapter. The tax due shall be no less than the monthly installment due, but the taxpayer may at any time pay the tax due for the entire fiscal year. Each business shall pay on or before the last day of the month following the close of each month. (Ord. CCO-18-06 § 3, 2018)
3.47.050 Payment of tax does not authorize unlawful business or activity.
The payment of any commercial cannabis business tax required under the provisions of this chapter shall not be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal matter. Nothing in this section implies or authorizes that any activity connected with the distribution or possession of cannabis is legal unless authorized by California and Federal law. Nothing in this section shall be applied or construed as authorizing the sale of cannabis. (Ord. CCO-18-06 § 3, 2018)
3.47.060 Modification, repeal, or amendment.
The voters expressly authorize the City Council to amend, modify, change, revise, or repeal any provision in this chapter as the City Council deems in the best interest of the City 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 amendments to MSMC 3.47.010 that would increase the rate of any tax levied pursuant to this chapter above the maximum rates established by this chapter.
The City Council may impose any tax authorized by this chapter at a lower rate and may establish exemptions, incentives, or other reductions, and interest charges for failure to pay the tax in a timely manner, as otherwise allowed by California law. No action by the Council under this section shall prevent it from later increasing the tax or removing any exemption, incentive, or reduction, and restoring the maximum tax rates specified in this chapter. (Ord. CCO-18-06 § 3, 2018)
3.47.070 Administration.
(A) The City Manager or the City Manager’s designee shall promulgate rules, regulations, and procedures to implement and administer this chapter to ensure the efficient and timely collection of the tax imposed by this chapter.
(B) The City Manager or the City Manager’s designee shall annually audit the commercial cannabis industry taxes imposed by this chapter to verify that tax revenues have been properly expended in accordance with the law. The City Manager’s agent shall have the right to examine and audit all the books, business records and tax returns to verify that tax revenues have been properly reported and paid. (Ord. CCO-18-06 § 3, 2018)