MEETING DATE: 3/19/2019
DEPARTMENT: AGRICULTURAL COMMISSIONER
DEPT HEAD/DIRECTOR: Karen Overstreet
AGENDA ITEM PREPARER: Dulce Alonso
SBC DEPT FILE NUMBER: 1.1
SUBJECT:
AGRICULTURAL COMMISSIONER - K. OVERSTREET
Adopt a resolution amending the Cannabis Business Activities Tax Rate for Cannabis Business Activity Type: Microbusiness (Non-Retailer) from 4% to 3.5% of gross receipts and readopting the full schedule of Cannabis Business Activities Tax Rates.
SBC FILE NUMBER: 1.1
RESOLUTION NO: 2019-20
AGENDA SECTION:
CONSENT AGENDA
BACKGROUND/SUMMARY:
On June 5, 2018, the people of San Benito County passed Measure C, thereby enacting Article V of San Benito County Code Chapter 5.03 (Cannabis Business Activities Tax) which sets forth the following ranges for cannabis business activities within the unincorporated area of San Benito County:
|
Cannabis Business Activities Tax Minimum and Maximum
|
|
Cannabis Business Activity Type: Cultivation
|
Per Square Foot (minimum)
|
Per Square Foot (maximum)
|
|
Nursery
|
$3.00
|
$17.00
|
|
Outdoor (specialty cottage)
|
$3.00
|
$17.00
|
|
Outdoor (specialty)
|
$3.00
|
$17.00
|
|
Outdoor (small)
|
$3.00
|
$17.00
|
|
Outdoor (medium)
|
$3.00
|
$17.00
|
|
Outdoor (large)
|
$3.00
|
$17.00
|
|
Indoor (specialty cottage)
|
$3.00
|
$17.00
|
|
Indoor (specialty)
|
$3.00
|
$17.00
|
|
Indoor (small)
|
$3.00
|
$17.00
|
|
Indoor (medium)
|
$3.00
|
$17.00
|
|
Indoor (large)
|
$3.00
|
$17.00
|
|
Mixed-Light (specialty cottage)
|
$3.00
|
$17.00
|
|
Mixed-Light (specialty)
|
$3.00
|
$17.00
|
|
Mixed-Light (small)
|
$3.00
|
$17.00
|
|
Mixed Light (medium)
|
$3.00
|
$17.00
|
|
Mixed-Light (large)
|
$3.00
|
$17.00
|
|
Cannabis Business Activity Type: Distribution
|
% Gross Receipts (minimum)
|
% Gross Receipts (maximum)
|
|
Distributor
|
2%
|
4%
|
|
Distributor (Transportation-Only)
|
0.5%
|
4%
|
|
Cannabis Business Activity Type: Manufacturing
|
% Gross Receipts (minimum)
|
% Gross Receipts (maximum)
|
|
Manufacturing (Level 1)
|
2.5%
|
4%
|
|
Manufacturing (Level 2)
|
2.5%
|
4%
|
|
Cannabis Business Activity Type: Microbusiness
|
% Gross Receipts (minimum)
|
% Gross Receipts (maximum)
|
|
Microbusiness (Retailer)
|
4%
|
5%
|
|
Microbusiness (Non-Retailer)
|
2.5%
|
3.5%
|
|
Cannabis Business Activity Type: Retailer
|
% Gross Receipts (minimum)
|
% Gross Receipts (maximum)
|
|
Retailer (Out-of-County Delivery-Only)
|
0.5%
|
3%
|
|
Retailer
|
4%
|
8%
|
|
Cannabis Business Activity Type: Testing Laboratory
|
% Gross Receipts (minimum)
|
% Gross Receipts (maximum)
|
|
Testing Laboratory
|
0.5%
|
4%
|
On March 5, 2019 the San Benito County Board of Supervisors adopted Resolution No. 2019-19, thereby adopting the following Cannabis Business Activities Tax Rates:
|
Cannabis Business Activities Tax Rates
|
|
Cannabis Business Activity Type: Cultivation
|
Per Square Foot
|
|
Nursery
|
$5.00
|
|
Indoor (specialty cottage)
|
$5.00
|
|
Indoor (specialty)
|
$5.00
|
|
Indoor (small)
|
$5.00
|
|
Indoor (medium)
|
$5.00
|
|
Indoor (large)
|
$5.00
|
|
Mixed-Light (specialty cottage)
|
$5.00
|
|
Mixed-Light (specialty)
|
$5.00
|
|
Mixed-Light (small)
|
$5.00
|
|
Mixed Light (medium)
|
$5.00
|
|
Mixed-Light (large)
|
$5.00
|
|
Cannabis Business Activity Type: Distribution
|
% Gross Receipts
|
|
Distributor
|
4%
|
|
Distributor (Transportation-Only)
|
4%
|
|
Cannabis Business Activity Type: Manufacturing
|
% Gross Receipts
|
|
Manufacturing (Level 1)
|
4%
|
|
Manufacturing (Level 2)
|
4%
|
|
Cannabis Business Activity Type: Microbusiness
|
% Gross Receipts
|
|
Microbusiness (Non-Retailer)
|
4%
|
|
Cannabis Business Activity Type: Retailer
|
% Gross Receipts
|
|
Out-of-County Delivery-Only
|
3%
|
|
Cannabis Business Activity Type: Testing Laboratory
|
% Gross Receipts
|
|
Testing Laboratory
|
1.25%
|
Because the maximum allowable tax rate for Microbusiness (Non-Retailer) is 3.5% of gross receipts, the rate of 4% of gross receipts as adopted by the Board on March 5, 2019 requires amendment in order to comply with the range adopted by the people of San Benito County on June 5, 2018 (Measure C).
It is therefore staff's recommendation that the Board adopt a Resolution adjusting the tax rate applicable to Microbusiness (Non-Retailer) to be 3.5% of gross receipts and readopting a conformed Cannabis Business Activities Tax Rate Schedule (Exhibit A), as follows:
|
Cannabis Business Activities Tax Rates
|
|
Cannabis Business Activity Type: Cultivation
|
Per Square Foot
|
|
Nursery
|
$5.00
|
|
Indoor (specialty cottage)
|
$5.00
|
|
Indoor (specialty)
|
$5.00
|
|
Indoor (small)
|
$5.00
|
|
Indoor (medium)
|
$5.00
|
|
Indoor (large)
|
$5.00
|
|
Mixed-Light (specialty cottage)
|
$5.00
|
|
Mixed-Light (specialty)
|
$5.00
|
|
Mixed-Light (small)
|
$5.00
|
|
Mixed Light (medium)
|
$5.00
|
|
Mixed-Light (large)
|
$5.00
|
|
Cannabis Business Activity Type: Distribution
|
% Gross Receipts
|
|
Distributor
|
4%
|
|
Distributor (Transportation-Only)
|
4%
|
|
Cannabis Business Activity Type: Manufacturing
|
% Gross Receipts
|
|
Manufacturing (Level 1)
|
4%
|
|
Manufacturing (Level 2)
|
4%
|
|
Cannabis Business Activity Type: Microbusiness
|
% Gross Receipts
|
|
Microbusiness (Non-Retailer)
|
3.5%
|
|
Cannabis Business Activity Type: Retailer
|
% Gross Receipts
|
|
Out-of-County Delivery-Only
|
3%
|
|
Cannabis Business Activity Type: Testing Laboratory
|
% Gross Receipts
|
|
Testing Laboratory
|
1.25%
|
BUDGETED: