| Posted on Fri, June, 24th 2011 by THCFinder
Next month, medical cannabis dispensaries within Sacramento city limits will begin paying a 4 percent tax on their gross receipts.
With the new tax, Sacramento joins the growing number of cities across the country collecting money from medical-cannabis sales. Sacramento city manager spokeswoman Amy Williams says the tax will bring in an estimated $1 million in revenue anually. The money will go to the city’s general fund.
Voters last November approved Measure C, the Sacramento “Marijuana Business Tax,” by an overwhelming 71 percent.
Measure C was originally intended to allow the city council to tax recreational marijuana sales anywhere from 5 to 10 percent should Proposition 19 pass.
But Measure C also included a provision that allowed the city to tax medical-cannabis dispensary gross receipts should Proposition 19 be defeated.
In California, voters in Albany, Berkeley, La Puente, Long Beach, Morro Bay, Rancho Cordova, Richmond, San Jose and Stockton all approved various taxes on dispensaries or medical-cannabis sales. The taxes ranged from 2.5 to 10 percent.
With the stuttering economy killing tax revenues across the country, local governments have searched for ways to save vital services like police and fire protection. As sales in the medical-cannabis industry take off, city officials are seeing green.
Sonny Kumar, executive director of El Camino Wellness Center, expressed differing feelings about the new tax.
“The reason the El Camino supports the tax is because we want to be able to contribute to the community,” Kumar said. “And we accept that one of the ways to do that is to pay taxes.”
But he says the 4 percent tax was higher than what he and other dispensary owners were hoping.
Nearby Oakland has voted to increase its special tax on dispensaries, now tacking on another $50 for every $1,000 of sales, which is in addition to the city’s sales tax. The city also planned to license four industrial-sized pot farms and collect millions of dollars in yearly fees. Thousands of investors lined up to grab one of the permits; the city’s plans fell apart after receiving a threatening letter from federal prosecutors.