Title
Marijuana Excise Tax Ordinance
Body
Summary and Background Information: The City Council needs to approve an ordinance to implement the 5% excise tax on wholesale transfers of marijuana and marijuana products approved by voters on November 7, 2017. Ballot Issue 2C, approved by a vote of 53.14% Yes (3,610) to 46.86% No (3,184), authorized a tax of 5% on all such wholesale transfers (adjustable up or down in the future, but not more than 10%). Revenues of the tax are required to be dedicated for public safety uses.
The wholesale excise tax is in addition to the City’s 4.5% sales and use tax. The wholesale excise tax would not overlap with the City’s 7% retail sales tax applicable to marijuana and marijuana products.
The ballot issue approved by voters authorizes a 5% tax on every wholesale transfer of marijuana and marijuana products (including transfers by the same business between licenses). The tax would be assessed at the average market rate (for marijuana) or the greater of the price or cash value (for marijuana products). Marijuana paraphernalia is excluded from the excise tax on marijuana products. Options for a more restricted tax include reducing the tax rate, limiting taxable transactions, or limiting the tax to marijuana only.
Attachments:
1) Draft Ordinance
2) Redline Tax Code
3) Tabor Notice
4) Presentation
Staff Responsible (Department Head): Robert Sheesley, City Attorney/Sheryl Carstens, Finance Director
Staff Member Presenting: Robert Sheesley, City Attorney/Sheryl Carstens, Finance Director
Financial Impact: n/a
Funding Source: n/a
Staff Recommendation: n/a