City of Long Beach Medical Marijuana Sales Tax, Proposition A (April 2014), full text
The full text of the legislation that would be enacted by City of Long Beach Proposition A:
AN ORDINANCE OF THE CITY OF LONG BEACH, CALIFORNIA AMENDING THE LONG BEACH MUNICIPAL CODE BY ADDING SECTION 3.80.261 RELATING TO A MARIJUANA BUSINESS LICENSE GENERAL TAX THE PEOPLE OF THE CITY OF LONG BEACH DO ORDAIN AS FOLLOWS:
Section 1. The Long Beach Municipal Code is amended by adding
Section 3.80.261 to read as follows:
Annual Business License Tax.
1. Every Marijuana Business whether it is a "not for profit," a "non-profit," or a "Non-Profit Organization," as defined in this Section, or a for-profit business, shall pay an annual business license tax in accordance with Chapter 3.80 of this Code and the Sections and Subsections hereunder.
2. For the purposes of this Section, a Marijuana Business and a Marijuana Cultivation Facility are each considered to be a business as that term is defined in Long Beach Municipal Code 3.80.133.
3. For the purposes of this Section, a Marijuana Business and a Marijuana Cultivation Facility are not considered to be a religious or charitable organization as defined in Section 3.80.320 (Exemption - Religious and charitable organizations).
4. For the purposes of this Section, "Marijuana Business" shall mean any activity that involves, but is not limited to planting, cultivating, harvesting, transporting, dispensing, delivering, selling at retail or wholesale, manufacturing, compounding, converting, processing, preparing, storing, packaging or testing, any part of the plant cannabis sativa L, or any of its derivatives.
5. For the purposes of this Section, a not for profit, a non-profit, or a "Non-Profit Organization" shall mean any association, corporation or other entity that is exempt from taxation measured by income or gross receipts under Article XIII, Section 26 of the California Constitution.
6. For the purposes of this Section, "Gross Receipts" shall mean any transfer of title or possession, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration including any monetary consideration for marijuana whatsoever, including, but not limited to, membership dues, reimbursements or the total amount, in any calendar year of cash or in-kind contributions, including all operating costs related to the growth, cultivation or provision of marijuana or any transaction related thereto. The term "Gross Receipts" shall also include the total amount, in any calendar year, of the sale price of all sales, the total amount charged or received for the performance of any act, service or employment of whatever nature it may be, whether or not such service, act or employment is done as a part of or in connection with the sale of goods, wares, merchandise, for which a charge is made or credit allowed, including all refunds, cash credits and properties of any amount or nature, any amount for which credit is allowed by the seller to the purchaser without any deduction therefrom, on account of the cost of the property sold, the cost of materials used, the labor or service cost, interest paid or payable, losses, or any other expense whatsoever; provided that cash discounts allowed or payment on sales shall not be included. "Gross Receipts" shall also include the amount of any federal, manufacturer's or importer's excise tax included in the price of property sold, even though the manufacturer or importer is also the retailer thereof and whether or not the amount of such tax is stated as a separate charge. "Gross Receipts" shall not include the amount of any federal tax imposed on or with respect to retail sales whether or not the amount of such tax is stated as a separate charge. "Gross Receipts" shall not include the amount of any federal tax imposed on or with respect to retail sales whether imposed upon the retailer or the consumer and regardless of whether or not the amount of federal tax is stated to customers as a separate charge, or any California state, city or city and county sales or use tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser, or such part of the sales price of any property previously sold and returned by the purchaser to the seller which is refunded by the seller by way of cash or credit allowances given or taken as part payment on any property so accepted for resale. "Gross Receipts" shall be calculated without any deduction on account of any of the following:
labor or service cost, interest paid, losses, or other expense; or
marijuana, or other property or product.
7. For the purposes of this Section, "Square Foot" or "Square Footage" shall mean the sum of the gross horizontal areas of all floors, including garages, carports, porches or similar structures, parking structures, usable basement areas, cellars, hallways, or common areas below the roof and within the outer surface of the main walls of buildings (or the center lines of party walls separating such buildings or portions thereof) or within the lines drawn parallel to and two feet (2') within the roof line of any building or portion thereof without walls (which includes Square Footage of all porches), and including pedestrian walkways or corridors. For purposes of this Section, the portion of a site devoted to retail sales shall not be included in the Square Footage calculation unless it is for a non-profit as defined by this Chapter.
8. For the purposes of this Section, a "Marijuana Business," "Cultivation Facility" or "Grow Site" shall mean the Square Footage of any place or location where marijuana or any of its derivatives is cultivated, grown, harvested, packaged, processed or stored.
B. Business license tax rates for Marijuana Businesses and Cultivation Facilities.
1. Every Marijuana Business shall pay business tax at a rate of up to ten percent (10%) of Gross Receipts. The tax shall be initially set at a rate of six percent (6%). The tax under this Chapter shall not be increased on Marijuana Businesses unless and until the City Council by ordinance takes action, and the tax rate shall not exceed ten percent (10%) of Gross Receipts.
2. Notwithstanding the maximum tax rate of ten percent (10%) of Gross Receipts imposed under Subsection B.1., the City Council may in its discretion at any time by ordinance implement a lower tax rate for all Marijuana Businesses, as defined in such ordinance, subject to the maximum rate of ten percent (10%) of Gross Receipts. The City Council may by ordinance increase any such tax rate from time to time, not to exceed the maximum tax rate of ten percent (10%) of Gross Receipts established under Subsection B.1.
3. In addition to the foregoing, the owner, operator, or lessee of any "Marijuana Business," "Cultivation Facility" or "Grow Site" existing to supply marijuana to a Marijuana Business shall pay a tax of up to fifty dollars ($50.00) per Square Foot on all improvements owned, rented, leased or otherwise occupied or used by a Cultivation Facility or Grow Site. The tax shall initially be set at a rate of fifteen dollars ($15) per Square Foot. The City Council may by ordinance increase any such tax rate from time to time, not to exceed the maximum tax rate of fifty dollars ($50) per Square Foot.
4. Notwithstanding Section 3.80.320 of this Code, there is imposed on every Marijuana Business that is a not for profit, a non profit, or Non-Profit Organization, or a for profit business, including all of its ancillary locations, regardless of the number of square feet it occupies, a tax of ten dollars ($10.00) per Square Foot on all business improvements occupied by that Marijuana Business and Cultivation Facility or Grow Site. For the purpose of this Section, all of the square feet of improvements owned, rented, leased or otherwise occupied or used by a Marijuana Business within the City shall be cumulated.
5. All Marijuana Businesses or Marijuana Cultivation Facilities shall pay a minimum tax of one thousand dollars
C. Modification, Repeal or Amendment.
The City Council may repeal the ordinance codified in this Section, or amend it in a manner which does not result in an increase in the tax or taxes imposed herein, without further voter approval. If the City Council repeals said ordinance or any provision of this Section, it may subsequently reenact it without voter approval, as long as the reenacted ordinance or Section does not result in an increase in the tax or taxes imposed herein.
The City Manager, or designee, and/or the City Council by ordinance, may promulgate regulations to implement and administer this Section including, but not limited to regulations allowing Marijuana Businesses to remit taxes less frequently than monthly.
E. Annual Adjustment.
The taxes imposed by this Section shall be adjusted annually by the Director of Financial Management. Beginning on July 1, 2016, and on July 1 of each succeeding year thereafter, the amount of each tax imposed by this Section shall be adjusted equivalent to the most recent change in the annual average of the Consumer Price Index ("CPI") for all urban consumers in the Los Angeles-Riverside-Orange County areas as published by the United States Government Bureau of Labor Statistics; however no adjustment shall decrease any tax imposed by this Section. For the purposes of calculating the annual adjustment factor under this Section, the base year shall be that year ending with December 31, 2014. Rates shall next be adjusted on July 1, 2016, and annually thereafter, based on the annually calculated change from the base year. The July 1, 2016 adjustment shall be the change in the average CPI for the year ending December 31,2015.
F. Reporting and Remittance.
In order to aid in the City's collection of taxes due under this Section and to ensure that all Marijuana Businesses and Cultivation Sites are taxed consistently to the best of the City's ability, beginning as set forth in Section K, below, and monthly thereafter, each Marijuana Business shall report to the City any Gross Receipts received during the reporting period and shall likewise remit to the City the taxes due and owing during said period. For purposes of this Section, taxes shall begin to accrue on the date that a person or entity first receives a business license or other permit to operate as a Marijuana Business or Cultivation Site. Square Footage payments shall be made annually at the beginning of the calendar year and should be based on the most recent County Assessors records, pro-rated based on the number of months of operation.
G. Delinquent date-Penalty.
Any individual or entity who fails to pay the taxes required by this Section within thirty (30) days after the due date shall pay in addition to the taxes a penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due. Additional penalties will be assessed in the following manner: ten percent (10%) shall be added on the first day of each calendar month following the month of the imposition of the twenty five percent (25%) penalty if the tax remains unpaid; up to a maximum of one hundred percent (100%) of the tax payable on the due date. Receipt of the tax payment in the office shall govern the determination of whether the tax is delinquent. Postmarks will not be accepted as adequate proof of a timely payment.
H. Records Inspection.
Whenever it is necessary to examine any books or records, including tax returns, of any Marijuana Business or Cultivation Site in the City to ascertain the amount of any tax due pursuant to this Section, the City shall have the power and authority to examine such necessary books and records at any reasonable time including, but not limited to, during normal business hours. Records must be maintained for no less than seven (7) years.
I. Suspension, Revocation and Appeal.
The provisions of Sections 3.80.429.1 (Suspension or Revocation) and Section 3.80.429.5 (Appeal of License Revocation) shall apply in the case of Marijuana Businesses or Cultivation Sites governed by this Section.
J. Application of Provisions.
No business license permit issued under the provisions of this Article, or the payment of any tax required under the provisions of this Article shall be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this Section implies or authorizes that any activity connected with the distribution or possession of cannabis is legal unless otherwise authorized and allowed by California and federal law. Nothing in this Section shall be applied or construed as authorizing the sale of marijuana.
K. Operative Date.
This ordinance establishing a medical Marijuana Business tax shall only become operative 1) if the City repeals Section 5.89 of the Long Beach Municipal Code (banning the sale of marijuana in the City of Long Beach) and 2) if the City adopts a regulatory scheme to permit cultivation, dispensing or sale of medical marijuana. The tax shall become effective on the effective date of the regulatory ordinance. Section 2. If any section, sentence, clause, phrase, or portion of this ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining sections, sentences, clauses, phrases, or portions of this ordinance shall nonetheless remain in full force and effect. The people of the City of Long Beach hereby declare that they would have adopted each section, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that anyone or more sections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable and, to that end, the provisions of this Ordinance are severable.
As provided in Section 2001 of the Long Beach City Charter, if a majority of those electors voting on this ordinance vote in favor of same, it shall be adopted upon a declaration of the result of such ballot by the City Council, and it shall take effect ten (10) days after that date, or the effective date of the regulatory ordinance, whichever is later.
- Long Beach City Government website, "Proposition A full text," accessed April 4, 2014
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.