I. RECOMMENDATION:
Introduce and Waive First Reading of Ordinanace No. 879 Amending Section 3-9.02 of the Municipal Code Relating to Cannabis Tax.
II. BACKGROUND:
Section 3-9.02 of Chapter 9 of Title 3 of the Coalinga Municipal Code establishes a "Gross receipts" tax for commercial cannabis operations. The City Council has requested to amend section 3-9.02 to allow the established tax for various cannabis operations to be reduced from 10% to 5%.
III. DISCUSSION:
City Council was provided with information at the February 19th City Council Meeting to evaluate whether the City’s existing tax rate remains appropriate in relation to market conditions, regional competitiveness, and long-term revenue considerations.
The City of Coalinga currently imposes a local retail cannabis sales tax of 10 percent on gross receipts. The City Council has directed Staff to reduce the 10 percent tax rate on gross receipts to 5 percent to keep in line with other jurisdictions.
IV. ALTERNATIVES:
None.
V. FISCAL IMPACT:
The average quarterly amount currently coming in from "gross" receipts is approximately $36,500. The 5 percent reduction will decrease the "gross" receipt revenue by half. |