TAXES
Monterey County BOS - July 12, 2016
Attachment I - Ordnance adding chapter 7.pdf
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AN ORDINANCE OF THE COUNTY OF MONTEREY, STATE OF CALIFORNIA, ADDING CHAPTER 7.100 TO THE MONTEREY COUNTY CODE IMPOSING A COMMERCIAL CANNABIS BUSINESS TAX ON COMMERCIAL CANNABIS BUSINESS
County Counsel Summary
This ordinance adds Chapter 7.100 to the Monterey County Code to impose a County general tax on commercial cannabis businesses in the unincorporated area of Monterey County as of January 1, 2017.
This ordinance establishes the following tax rates: for cultivation, the tax rate is $15 per fiscal year per square foot of authorized canopy through June 30 2020, to increase to $25 per square foot by June 30, 2022, and to increase thereafter based on the Consumer Price Index; for nursery cultivation, the tax rate is $1.50 per square foot of authorized canopy through June 30, 2020, and to increase to $5 per square foot of authorized canopy through June 30, 2022, and to increase thereafter based on Consumer Price Index; and for all other commercial cannabis businesses, including dispensaries, manufacturing, testing, transporting,distributing, and delivery, the tax rate is five percent of the gross receipts per fiscal year through June 30, 2020, to increase thereafter by two and one-half percent per fiscal year, not to exceed a maximum tax rate of ten percent per fiscal year on gross receipts.
The tax applies to commercial medical cannabis business and if legalized under state law, to nonmedical cannabis or marijuana businesses.
Personal cultivation and personal use, as further delineated in the ordinance, are exempt from the tax.
The ordinance contains payment and reporting requirements and enforcement provisions and authorizes the County Treasurer-Tax Collector to administer the tax.
The tax is for general governmental purposes and will go into effect only if the tax is approved by a majority of the voting voting on the tax at an election.
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Now to try and put this into perspective:
IF you had a half acre grow of 22,000 sq feet x $15 a sq foot a year that means you would be paying $330,000 for that one tax alone.
That's not even taking into account the 10% State Tax that is coming in 2017.
And by 2022 when it rises to $25 a sq foot that half acre tax will go to $550,000.
Now to calculate a single crops yield at roughly 20 grams per sq foot of canopy at 22,000 sq feet you would get 440,000 grams, or 969 lbs, and if you were to sell them for $1,000 you would get $969,162.
Because of the absurdly high taxation being proposed Monterey County NORML suggests switching to a 5% Wholesale to Distributor Tax instead of the $15 -> $25 a sq foot tax.
Slack Channel: #taxes
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