HomeMy WebLinkAbout3103 Marijuana Tax
ORDINANCE NO._' ! l) 3
AN ORDINANCE ESTABLISHING A TAX ON THE
SALE OF MARIJUANA AND MARIJUANA-INFUSED
PRODUCTS IN THE CITY OF ASHLAND
Annotated to show deletions and additions to the code sections being modified. Deletions are
bold lined through and additions are bold underlined.
WHEREAS, Article 2, Section 1 of the Ashland City Charter provides:
Powers of the City. The City shall have all powers which the constitutions, statutes and
common law of the United States and this State expressly or impliedly grant or allow
municipalities, as fully as though this Charter specifically enumerated each of those
powers, as well as all powers not inconsistent with the foregoing and, in addition thereto,
shall possess all powers hereinafter specifically granted. All the authority thereof shall
have perpetual succession.
WHEREAS, the City desires to tax the sale or transfer of marijuana and marijuana-infused
products within the City.
THE PEOPLE OF THE CITY OF ASHLAND DO ORDAIN AS FOLLOWS:
SECTION 1. Title 4 Revenue and Finance of the Ashland Municipal Code hereby adds a new
Chapter 4.38, establishing a tax on the sale of marijuana and marijuana-infused products, as
follows:
SECTION 4.38.010 Purpose.
For the purposes of this Chapter, every person who sells marijuana, medical marijuana or
marijuana-infused products in the City of Ashland is exercising a taxable privilege. The
purpose of this Chapter is to impose a tax upon the retail sale of marijuana, medical
marijuana, and marijuana-infused products.
SECTION 4.38.020 Definitions.
When not clearly otherwise indicated by the context, the following words and phrases as
used in this chapter shall have the following meanings:
A. "Director" means the Director of Finance for the City of Ashland or his/her designee.
B. "Gross Taxable Sales" means the total amount received in money, credits, property or
other consideration from sales of marijuana, medical marijuana and marijuana-infused
products that is subject to the tax imposed by this chapter.
C. "Marijuana" means all parts of the plant of the Cannabis family Moraceae, whether
growing or not; the resin extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant or its resin, as may be
defined by Oregon Revised Statutes as they currently exist or may from time to time, be
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amended. It does not include the mature stalks of the plant, fiber produced from the
stalks, oil or cake made from the seeds of the plant, any other compound, manufacture,
salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted
there from), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of
germination.
D. "Oregon Medical Marijuana Program" means the office within the Oregon Health
Authority that administers the provisions of ORS 475.300 through 475.346, the Oregon
Medical Marijuana Act, and all policies and procedures pertaining thereto.
E. "Person" means natural person, joint venture, joint stock company, partnership,
association, club, company, corporation, business, trust, organization, or any group or
combination acting as a unit, including the United States of America, the State of Oregon
and any political subdivision thereof, or the manager, lessee, agent, servant, officer or
employee of any of them.
F. "Purchase or Sale" means the retail acquisition or furnishing for consideration by any
person of marijuana within the City and does not include the acquisition or furnishing
of marijuana by a grower or processor to a seller.
G. "Registry identification cardholder" means a person who has been diagnosed by an
attending physician with a debilitating medical condition and for whom the use of
medical marijuana may mitigate the symptoms or effects of the person's debilitating
medical condition, and who has been issued a registry identification card by the Oregon
Health Authority.
H. "Retail sale" means the transfer of goods or services in exchange for any valuable
consideration and does not include the transfer or exchange of goods or services
between a grower or processor and a seller.
1. "Seller" means any person who is required to be licensed or has been licensed by the
State of Oregon to provide marijuana or marijuana-infused products to purchasers for
money, credit, property or other consideration.
J. "Tax" means either the tax payable by the seller or the aggregate amount of taxes due
from a seller during the period for which the seller is required to report collections under
this chapter.
K. "Taxpayer" means any person obligated to account to the Finance Director for taxes
collected or to be collected, or from whom a tax is due, under the terms of this chapter.
SECTION 4.38.030 Lew of Tax.
A. There is hereby levied and shall be paid a tax by every seller exercising the taxable
privilege of selling marijuana and marijuana-infused products as defined in this chapter.
B. The amount of tax levied is shall be established by a City Council resolution.
SECTION 4.38.040 Deductions.
The following deductions shall be allowed against sales received by the seller providing
marijuana:
A. Refunds of sales actually returned to any purchaser;
B. Any adjustments in sales which amount to a refund to a purchaser, providing such
adjustment pertains to the actual sale of marijuana or marijuana-infused products and
does not include any adjustments for other services furnished by a seller.
Ordinance No. Page 2 of 8
SECTION 4.38.050 Seller Responsible For Payment Of Tax.
A. Every seller shall, on or before the last day of the month following the end of each
calendar quarter (in the months of April, July, October and January) make a return to the
Director, on forms provided by the City, specifying the total sales subject to this chapter
and the amount of tax collected under this chapter. The seller may request or the Director
may establish shorter reporting periods for any seller if the seller or Director deems it
necessary in order to insure collection of the tax and the Director may require further
information in the return relevant to payment of the tax. A return shall not be considered
filed until it is actually received by the Director. -
B. At the time the return is filed, the full amount of the tax collected shall be remitted to the
Director. Payments received by the Director for application against existing liabilities
will be credited toward the period designated by the taxpayer under conditions that are
not prejudicial to the interest of the City. A condition considered prejudicial is the
imminent expiration of the statute of limitations for a period or periods.
C. Non-designated payments shall be applied in the order of the oldest liability first, with the
payment credited first toward any accrued penalty, then to interest, then to the underlying
tax until the payment is exhausted. Crediting of a payment toward a specific reporting
period will be first applied against any accrued penalty, then to interest, then to the
underlying tax. If the Director, in his or her sole discretion, determines that an alternative
order of payment application would be in the best interest of the City in a particular tax or
factual situation, the Director may order such a change. The Director may establish
shorter reporting periods for any seller if the Director deems it necessary in order to
insure collection of the tax. The Director also may require additional information in the
return relevant to payment of the liability. When a shorter return period is required,
penalties and interest shall be computed according to the shorter return period. Returns
and payments are due immediately upon cessation of business for any reason. All taxes
collected by sellers pursuant to this chapter shall be held in trust for the account of the
City until payment is made to the Director. A separate trust bank account is not required
in order to comply with this provision.
D. Every seller required to remit the tax imposed in this chapter shall be entitled to retain
five percent (5%) of all taxes due to defray the costs of bookkeeping and remittance.
E. Every seller must keep and preserve in an accounting format established by the Director
records of all sales made by the dispensary and such other books or accounts as may be
required by the Director. Every seller must keep and preserve for a period of three (3)
years all such books, invoices and other records. The Director shall have the right to
inspect all such records at all reasonable times.
SECTION 4.38.060 Penalties And Interest.
A. Any seller who fails to remit any portion of any tax imposed by this chapter within the
time required shall pay a penalty of ten percent (10%) of the amount of the tax, in
addition to the amount of the tax.
B. Any seller who fails to remit any delinquent remittance on or before a period of 60 days
following the date on which the remittance first became delinquent, shall pay a second
delinquency penalty of ten percent (10%) of the amount of the tax in addition to the
amount of the tax and the penalty first imposed.
Ordinance No. Page 3 of 8
C. If the Director determines that the nonpayment of any remittance due under this chapter
is due to fraud, a penalty of twenty-five percent (25%) of the amount of the tax shall be
added thereto in addition to the penalties stated in subparagraphs A and B of this section.
D. In addition to the penalties imposed, any seller who fails to remit any tax imposed by this
chapter shall pay interest at the rate of one percent (1 per month or fraction thereof on
the amount of the tax, exclusive of penalties, from the date on which the remittance first
became delinquent until paid.
E. Every penalty imposed, and such interest as accrues under the provisions of this section,
shall become a part of the tax required to be paid.
F. Notwithstanding subsection 4.34.020.C, all sums collected pursuant to the penalty
provisions in paragraphs A and C of this section shall be distributed to the City of
Ashland Central Service Fund to offset the costs of auditing and enforcement of this tax.
G. Waiver of Penalties. Penalties and interest for certain late tax payments may be waived
pursuant to AMC 2.28.045D.
SECTION 4.38.070 Failure To Report and Remit Tax -Determination of Tax by
Director.
If any seller should fail to make, within the time provided in this chapter, any report of the
tax required by this chapter, the Director shall proceed in such manner as deemed best to
obtain facts and information on which to base the estimate of tax due. As soon as the Director
shall procure such facts and information as is able to be obtained, upon which to base the
assessment of any tax imposed by this chapter and payable by any seller, the Director shall
proceed to determine and assess against such seller the tax, interest and penalties provided
for by this chapter. In case such determination is made, the Director shall give a notice of the
amount so assessed by having it served personally or by depositing it in the United States
mail, postage prepaid, addressed to the seller so assessed at the last known place of address.
Such seller may make an appeal of such determination as provided in section 4.34.080. If no
appeal is filed, the Director's determination is final and the amount thereby is immediately
due and payable.
SECTION 4.38.080 Appeal.
Any seller aggrieved by any decision of the Director with respect to the amount of such tax,
interest and penalties, if any, may appeal pursuant to the Administrative Appeals Process in
AMC 2.30.020, except that the appeal shall be filed within 30 days of the serving or mailing
of the determination of tax due. The hearings officer shall hear and consider any records and
evidence presented bearing upon the Director's determination of amount due, and make
findings affirming, reversing or modifying the determination. The findings of the hearings
officer shall be final and conclusive, and shall be served upon the appellant in the manner
prescribed above for service of notice of hearing. Any amount found to be due shall be
immediately due and payable upon the service of notice.
SECTION 4.38.090. Refunds.
A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than
once, or has been erroneously collected or received by the City under this chapter, it may
be refunded as provided in subparagraph B of this section, provided a claim in writing,
stating under penalty of perjury the specific grounds upon which the claim is founded, is
Ordinance No. Page 4 of 8
filed with the Director within one year of the date of payment. The claim shall be on
forms furnished by the Director.
B. The Director shall have 20 calendar days from the date of receipt of a claim to review the
claim and make a determination in writing as to the validity of the claim. The Director
shall notify the claimant in writing of the Director's determination. Such notice shall be
mailed to the address provided by claimant on the claim form. In the event a claim is
determined by the Director to be a valid claim, in a manner prescribed by the Director a
seller may claim a refund, or take as credit against taxes collected and remitted, the
amount overpaid, paid more than once or erroneously collected or received. The seller
shall notify Director of claimant's choice no later than 15 days following the date
Director mailed the determination. In the event claimant has not notified the Director of
claimant's choice within the 15 day period and the seller is still in business, a credit will
be granted against the tax liability for the next reporting period. If the seller is no longer
in business, a refund check will be mailed to claimant at the address provided in the claim
form.
C. No refund shall be paid under the provisions of this section unless the claimant
established the right by written records showing entitlement to such refund and the
Director acknowledged the validity of the claim.
SECTION 4.38.100 Actions to Collect.
Any tax required to be paid by any seller under the provisions of this chapter shall be deemed
a debt owed by the seller to the City. Any such tax collected by a seller which has not been
paid to the City shall be deemed a debt owed by the seller to the City. Any person owing
money to the City under the provisions of this chapter shall be liable to an action brought in
the name of the City of Ashland for the recovery of such amount. In lieu of filing an action
for the recovery, the City of Ashland, when taxes due are more than 30 days delinquent, can
submit any outstanding tax to a collection agency. So long as the City of Ashland has
complied with the provisions set forth in ORS 697.105, in the event the City turns over a
delinquent tax account to a collection agency, it may add to the amount owing an amount
equal to the collection agency fees, not to exceed the greater of fifty dollars ($50.00) or fifty
percent (50%) of the outstanding tax, penalties and interest owing.
SECTION 4.38.110 Violation Infractions.
A. All violations of this chapter are punishable as set forth in AMC 1.08.020. It is a violation
of this chapter for any seller or other person to:
1) Fail or refuse to comply as required herein;
2) Fail or refuse to furnish any return required to be made;
3) Fail or refuse to permit inspection of records;
4) Fail or refuse to furnish a supplemental return or other data required by the Director;
5) Render a false or fraudulent return or claim; or
6) Fail, refuse or neglect to remit the tax to the city by the due date.
B. Violation of subsections 1, 2, 3, 4 and 6 shall be considered a Class I violation. Filing a
false or fraudulent return shall be considered a Class C misdemeanor, subject to AMC
1.08. The remedies provided by this section are not exclusive and shall not prevent the
City from exercising any other remedy available under the law, nor shall the provisions
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of this ordinance prohibit or restrict the City or other appropriate prosecutor from
pursuing criminal charges under state law or City ordinance.
SECTION 4.38.120 Confidentiality.
Except as otherwise required by law, it shall be unlawful for the City, any officer, employee
or agent to divulge, release or make known in any manner any financial information
submitted or disclosed to the City under the terms of this chapter. Nothing in this section
shall prohibit:
A. The disclosure of the names and addresses of any person who is operating a licensed
establishment from which marijuana is sold or provided; or
B. The disclosure of general statistics in a form which would not reveal an individual
seller's financial information; or
C. Presentation of evidence to the court, or other tribunal having jurisdiction in the
prosecution of any criminal or civil claim by the Director or an appeal from the Director
for amount due the City under this chapter; or
D. The disclosure of information when such disclosure of conditionally exempt information
is ordered under public records law procedures; or
E. The disclosure of records related to a business' failure to report and remit the tax when
the report or tax is in arrears for over six months or the tax exceeds five thousand dollars
($5,000). The City Council expressly finds and determines that the public interest in
disclosure of such records clearly outweighs the interest in confidentiality under ORS
192.501(5).
SECTION 4.38.130 Audit of Books, Records or Persons.
The City, for the purpose of determining the correctness of any tax return, or for the purpose
of an estimate of taxes due, may examine or may cause to be examined by an agent or
representative designated by the City for that purpose, any books, papers, records, or
memoranda, including copies of seller's state and federal income tax return, bearing upon the
matter of the seller's tax return. All books, invoices, accounts and other records shall be
made available within the City limits and be open at any time during regular business hours
for examination by the Director or an authorized agent of the Director. If any taxpayer
refuses to voluntarily furnish any of the foregoing information when requested, the Director
may immediately seek a subpoena from the Ashland Municipal Court to require that the
taxpayer or a representative of the taxpayer attend a hearing or produce any such books,
accounts and records for examination.
SECTION 4.38.140 Forms And Regulations.
f A. The Director is hereby authorized to prescribe forms and promulgate rules and
regulations to aid in the making of returns, the ascertainment, assessment and collection of
~G said marijuana tax and in particular and without limiting the general language of this
chapter, to provide for:
1) A form of report on sales and purchases to be supplied to all vendors;
2) The records which sellers providing marihuana and marijuana-infused products are to
keep concerning the tax imposed by this chapter.
Ordinance No. Page 6 of 8
SECTION 2. Severability. The sections, subsections, paragraphs and clauses of this ordinance
are severable. The invalidity of one section, subsection, paragraph, or clause shall not affect the
validity of the remaining sections, subsections, paragraphs and clauses.
SECTION 3. Savings. Notwithstanding any amendment/repeal, the City ordinances in existence
at the time any criminal or civil enforcement actions were commenced, shall remain valid and in
full force and effect for purposes of all cases filed or commenced during the times said
ordinance(s) or portions thereof were operative. This section simply clarifies the existing
situation that nothing in this Ordinance affects the validity of prosecutions commenced and
continued under the laws in effect at the time the matters were originally filed.
SECTION 4. Codification. Provisions of this Ordinance shall be incorporated in the City Code
and the word "ordinance" may be changed to "code", "article", "section", "chapter" or another
word, and the sections of this Ordinance may be renumbered, or re-lettered, provided however
that any Whereas clauses and boilerplate provisions (i.e. Sections 2-4) need not be codified and
the City Recorder is authorized to correct any cross-references and any typographical errors.
The foregoing ordinance was first read by title only in accord cc with Article X,
Section 2(C) of the City Charter on the / day of 52014,
and d PASSED and ADOPTED this ` - day of , 2014.
C~~/~f4
Barbara M. Christensen, City Recorder
SIGNED and APPROVED this day of , 2014.
n Stromberg, Mayor
Reviews to form:
k1r
Dav'd . Lohman, City Attorney
Ordinance No. Page 7 of 8