To: Board of Supervisors
From: County Administrative Office
Agenda Section: Departmental
SUBJECT:
title
Direct the County Administrative Office (CAO) to Implement a Cannabis Excise Tax Suspension/Reduction Program
end
RECOMMENDATION(S):
Recommendation
That the Board of Supervisors:
1. Direct the CAO to develop a Cannabis Excise Tax Suspension/Reduction Program; and
2. Direct the CAO to draft a resolution for final review and approval establishing and documenting the program as directed by your Board; and
3. Provide additional direction as needed.
Body
SOURCE OF FUNDING:
Measure S Cannabis Excise Tax - General Fund (1100)
DISCUSSION:
This report seeks Board direction and possible action to create a Cannabis Excise Tax Suspension/Waiver program for Tax Year 2021 and direction on considerations for Tax Year 2022, billed and collected a year in arrears for calendar year 2022 and 2023. At the request of your Board, staff on Feb. 1, 2022 was directed to return with tax relief options to respond to the current state of the cannabis industry, which is experiencing unsustainably low market pricing and an inability to sell existing cannabis inventory.
The original agenda item presented on Feb. 1, 2022, received more than 60 comments and over 2 hours of input from members of the public, and most represented cannabis cultivators who advocated for your Board to provide relief from Measure S excise taxes in the form of a tax suspension. Your Board provided two concepts for a potential excise tax suspension/reduction program, a reduction (50-100%) based on an equal percentage to all tiers, or a percentage reduction based on cultivation tiers (Outdoor, Mixed Light or Indoor).
Tax Year vs. Collection Year vs. Fiscal Year
One the challenges in discussing cannabis excise tax assessments is that there are three different years being discussed for one year's assessment. Tax years are calendar years running from January to December. The assessments for a ...
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