At its weekly meeting Tuesday evening, the City Council voted to put a proposed marijuana business tax on the ballot this November. The tax, which would reach up to 10 percent, would encompass business that sell marijuana both legally and illegally in the city.
Reported sales of medical marijuana bring in about $1.5 million annually, which means that the city could take in about $150,000. In contrast, introducing a ballot measure costs $758,000 for the first measure and $366,000 for every additional measure. In other words, it will take at least two years for the city to recoup the cost of the ballot measure under the current circumstances.
On the other hand, officials note that in this November’s election voters will also decide whether to legalize marijuana for recreational use in California. If that ballot measure goes through, the city could earn considerably more revenue from the pot tax.
There are some ironies in the marijuana tax proposal. Councilmember Pete Constant and others argued that including the illegal sale of marijuana in the tax means legitimizing an illegal activity. City Finance Director Scott Johnson countered that it would be more costly for the city to spend time determining which businesses were operating legally and which were not. In other words, people who did not pay the tax would be able to argue that they were selling pot illegally and therefore should not be taxed.
Others argued that the tax would place a financial burden on low-income users of medical marijuana. The city countered by saying that it would review the tax structure for medical and recreational marijuana if marijuana was legalized and make a distinction accordingly.
Read More at CBS 5.