Jacob Bell
New Member
San Jose still considers all of the city's 100 or so medical marijuana shops to be unlawful nuisances, but officials will welcome the pot providers to City Hall Monday to talk about a new program of great interest to the broke city: a marijuana tax.
Starting Tuesday, San Jose will slap a 7 percent tax on marijuana dispensaries under a measure voters overwhelmingly approved in November.
The city -- which has emerged as a key battleground in the state's "green wars" over medical marijuana regulation -- isn't the only cash-strapped government with growing interest in getting a cut of the action.
Oakland and Berkeley raised their marijuana taxes in November. And state authorities last week made clear marijuana isn't exempt as medicine from sales taxes and demanded $6.4 million from a Berkeley dispensary.
San Jose officials argue that the taxman must be paid regardless of a business' legal status. And though most local dispensaries already are paying city business and California sales taxes, city officials feel they're not getting their fair share.
"We believe we're being grossly underpaid," Deputy City Manager Deanna Santana said.
For the city's medicinal marijuana providers, the whole situation seems surreal.
"It's in the code that you have to tax these businesses, but you don't have to -- even when you take their money -- say they're legitimate businesses," said David Hodges, who founded the San Jose Cannabis Buyers Collective, which relocated after city code enforcers threatened to fine its landlord.
San Jose has seen the number of dispensaries soar from zero to about 100 in less than two years since Councilman Pierluigi Oliverio suggested the city consider allowing and taxing a limited number of them. Voters, who have seen city services pared to close chronic deficits, approved the Oliverio-sponsored marijuana tax, Measure U, by 78 percent in November.
With San Jose facing a $110 million deficit in a 10th straight year of red ink, city officials are eager to start collecting the new tax even though zoning regulations allowing medical marijuana dispensaries are months from coming to a council vote. The city has invited pot providers to a seminar Monday at City Hall to learn about the new tax.
Many of the city's medical marijuana shops, however, are bristling.
Steven DeAngelo, executive director of the Harborside Health Center in Oakland and San Jose, says San Jose's pot tax, coupled with the 9.25 percent sales tax, will push retail marijuana prices above black-market levels and those of dispensaries in nearby cities.
"We'll see an outflow of patients to the illegal market or to other jurisdictions," DeAngelo said.
He noted that Berkeley's medical marijuana tax is just 2.5 percent, even after city voters in November approved an increase from 0.12 percent. Oakland voters approved raising that city's medical marijuana tax from 1.8 percent to 5 percent.
How much money San Jose's tax might yield the city is unclear. City officials in December said they have received a total of $13,412 in business taxes from 88 medical marijuana providers. The city also has received a total of $70,659 from its 1 percent share of state sales taxes from 61 marijuana dispensaries with sales tax permits.
But Santana said that considering Oakland has received $280,000 from $28 million in marijuana sales last year, San Jose most likely is owed more.
Not all marijuana providers are opposed to paying the tax
"It definitely would establish legitimacy," said Luke Teleske, president of the Garden House Remedies marijuana cooperative.
City finance officials noted in a Feb. 11 memorandum that a review has determined all of the known medical marijuana dispensaries violate council guidelines limiting them to commercial areas and requiring them to be at least 500 feet from homes, schools, libraries, day-care centers and each other.
Officials last week said they hope to have an ordinance for permitting and regulating a limited number of medical marijuana collectives before the City Council in June.
But marijuana providers will be expected to track gross receipts for taxes beginning Tuesday, with the first payment due April 30. Failure to pay up can lead to stiff penalties and even misdemeanor charges.
DeAngelo said he feels as if the city has put its tax cart before its regulatory horse.
"I can understand that it's a slow process, that it's unfamiliar territory," said DeAngelo, a veteran marijuana activist. "But if the city knows enough to impose a 7 percent tax, it should know enough to regulate."
News Hawk- GuitarMan313 420 MAGAZINE
Source: mercurynews.com
Author: John Woolfolk
Contact: Contact Us
Copyright: San Jose Mercury News
Website: San Jose to start taxing 'illegal' pot clubs
Starting Tuesday, San Jose will slap a 7 percent tax on marijuana dispensaries under a measure voters overwhelmingly approved in November.
The city -- which has emerged as a key battleground in the state's "green wars" over medical marijuana regulation -- isn't the only cash-strapped government with growing interest in getting a cut of the action.
Oakland and Berkeley raised their marijuana taxes in November. And state authorities last week made clear marijuana isn't exempt as medicine from sales taxes and demanded $6.4 million from a Berkeley dispensary.
San Jose officials argue that the taxman must be paid regardless of a business' legal status. And though most local dispensaries already are paying city business and California sales taxes, city officials feel they're not getting their fair share.
"We believe we're being grossly underpaid," Deputy City Manager Deanna Santana said.
For the city's medicinal marijuana providers, the whole situation seems surreal.
"It's in the code that you have to tax these businesses, but you don't have to -- even when you take their money -- say they're legitimate businesses," said David Hodges, who founded the San Jose Cannabis Buyers Collective, which relocated after city code enforcers threatened to fine its landlord.
San Jose has seen the number of dispensaries soar from zero to about 100 in less than two years since Councilman Pierluigi Oliverio suggested the city consider allowing and taxing a limited number of them. Voters, who have seen city services pared to close chronic deficits, approved the Oliverio-sponsored marijuana tax, Measure U, by 78 percent in November.
With San Jose facing a $110 million deficit in a 10th straight year of red ink, city officials are eager to start collecting the new tax even though zoning regulations allowing medical marijuana dispensaries are months from coming to a council vote. The city has invited pot providers to a seminar Monday at City Hall to learn about the new tax.
Many of the city's medical marijuana shops, however, are bristling.
Steven DeAngelo, executive director of the Harborside Health Center in Oakland and San Jose, says San Jose's pot tax, coupled with the 9.25 percent sales tax, will push retail marijuana prices above black-market levels and those of dispensaries in nearby cities.
"We'll see an outflow of patients to the illegal market or to other jurisdictions," DeAngelo said.
He noted that Berkeley's medical marijuana tax is just 2.5 percent, even after city voters in November approved an increase from 0.12 percent. Oakland voters approved raising that city's medical marijuana tax from 1.8 percent to 5 percent.
How much money San Jose's tax might yield the city is unclear. City officials in December said they have received a total of $13,412 in business taxes from 88 medical marijuana providers. The city also has received a total of $70,659 from its 1 percent share of state sales taxes from 61 marijuana dispensaries with sales tax permits.
But Santana said that considering Oakland has received $280,000 from $28 million in marijuana sales last year, San Jose most likely is owed more.
Not all marijuana providers are opposed to paying the tax
"It definitely would establish legitimacy," said Luke Teleske, president of the Garden House Remedies marijuana cooperative.
City finance officials noted in a Feb. 11 memorandum that a review has determined all of the known medical marijuana dispensaries violate council guidelines limiting them to commercial areas and requiring them to be at least 500 feet from homes, schools, libraries, day-care centers and each other.
Officials last week said they hope to have an ordinance for permitting and regulating a limited number of medical marijuana collectives before the City Council in June.
But marijuana providers will be expected to track gross receipts for taxes beginning Tuesday, with the first payment due April 30. Failure to pay up can lead to stiff penalties and even misdemeanor charges.
DeAngelo said he feels as if the city has put its tax cart before its regulatory horse.
"I can understand that it's a slow process, that it's unfamiliar territory," said DeAngelo, a veteran marijuana activist. "But if the city knows enough to impose a 7 percent tax, it should know enough to regulate."
News Hawk- GuitarMan313 420 MAGAZINE
Source: mercurynews.com
Author: John Woolfolk
Contact: Contact Us
Copyright: San Jose Mercury News
Website: San Jose to start taxing 'illegal' pot clubs
