I. RECOMMENDATION:
Councilman Adkisson requested a future agenda item to discuss the City's current cannabis tax structure and possible changes.
II. BACKGROUND:
The City currently taxes cannabis operators based on a voter approved ballot measure. The current tax structure is as follows:
Manufacturing, Testing, and Distribution
Currently Section 3-9.01 of the Coalinga Municipal Code reads as “every person engaged in commercial cannabis operations in the City shall pay an annual business operations tax not to exceed as follows: twenty-five dollars ($25.00) per square foot used in connection with each commercial Cannabis operation for the first 3,000 square feet, and ten dollars ($10.00) per square foot for each additional square foot thereafter. The square footage calculation shall be determined by including all portions of the premises deducting therefrom driveways, sidewalks, landscaping, vacant unused space, areas used exclusively for office space, employee break rooms, restrooms, and storage space unrelated to the commercial Cannabis operation (such as a janitorial closet).
For cultivation, a nursery is taxed at $2.00 per square foot of canopy and mature cultivation activity is taxed at $7.00 per square foot of canopy.
Retail is taxed at 15% gross receipts.
III. DISCUSSION:
The current municipal code allows the City Council to amend the established the annual business operations tax rate and square foot calculation by resolution.
IV. ALTERNATIVES:
V. FISCAL IMPACT:
The fiscal impact is dependent on a reduction and/or increase. |