To: Board of Supervisors
From: County Administrative Office
Agenda Section: Departmental
SUBJECT:
title
Update and Possible Board Action on Cannabis Excise Tax Reduction Program
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RECOMMENDATION(S):
Recommendation
That the Board of Supervisors:
1. Accept an update on the Cannabis Excise Tax Reduction Program; and
2. Consider providing staff direction on Tax Year 2023 Cannabis Excise Taxes.
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SOURCE OF FUNDING:
Measure S Cannabis Excise Tax - General Fund (1100)
DISCUSSION:
This report provides an update on the Cannabis Excise Tax Reduction program established by the Humboldt County Board of Supervisors (Board) on Feb. 7, 2022, and adopted by Resolution No. 22-34 on March 8, 2022. On Feb. 7, 2022, the Board was presented with options to suspend or reduce excise taxes. The Board elected to:
1. Allow Tax Year 2021 second installment payments originally due in October 2021 to be paid by Sept. 15, 2022, without penalty;
2. Allow Tax Year 2022 first installment payments originally due in March 2022 to be paid by Sept. 15, 2022, but with penalty;
3. Temporarily reduce Cannabis Excise taxes for Tax Year 2022 by 85% for all cultivators; and
4. Revisit Tax Year 2023 tax assessments in Fall of 2022.
Tax Year 2021 (Cultivation Year 2020)
At the Feb. 7, 2022 meeting, staff presented for Tax Year 2021 that 59% of cannabis excise tax accounts remained with balances owed. As of late September, that number has improved to 49% of accounts with balances owed. Total billed taxes for Tax Year 2021 were $19.6 million and the status of tax collections is as follows, as of Oct. 26, 2022:
Due to applied penalties to first installment payments, the total taxes billed have increased since last update resulting in a $1 million increase in taxes collected, but only $700,000 decreased in amount owed. The Board extended the second installment payment due date to Sept. 15, 2022, without penalty.
Tax Year 2022 (Cultivation Year 2021)
At the Feb. 7, 2...
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