CANNABIS BUSINESS TAX
On November 04, 2014, voters passed Measure K, the Cannabis Business Tax measure, which imposes a tax of no more than 10% (7% when enacted) on gross receipts of cannabis (medical marijuana) businesses in the unincorporated county. All of the proceeds from the Cannabis Business Tax shall be placed in the County’s general fund and used for the usual current expenses of the County.
On November 8, 2016, voters passed Measure E which modifies Chapter 4.06.030(F) and 4.06.030(G) of the Santa Cruz County Code amended to read as follows:
4.06.030(F) "Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, as defined under the California Medical Marijuana Regulation and Safety Act at Business and Professions Code section 19300.5(f), as may be amended.
4.06.030(G) "Cannabis business" or "medical marijuana business" means business activity directly involved with, related to, or concerning cannabis, including, but not limited to, cultivating, dispensing, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, or conducting wholesale and/or retail sales of cannabis and any ancillary products in the unincorporated area of the County, whether or not carried on for gain or profit.
On November 14, 2017, the County of Santa Cruz Board of Supervisors voted to amend Santa Cruz County Code Section 4.06.070(C) as follows:
(C) Pursuant to subsection (A) of this section, the cannabis business tax is set at seven percent of gross receipts. Commencing on the operative date of this chapter, every person engaged in cannabis business in the unincorporated area of the County shall pay a cannabis business tax at the rate of seven percent of gross receipts.
(1) Exception: Pursuant to the authority described above in subsection (B), the business tax rate for cannabis cultivation business and cannabis manufacturing business is modified as set forth below.
(2) Commencing on January 1, 2018, every person engaged in cannabis cultivation business shall pay a cannabis business tax at the rate of five percent of gross receipts through December 31, 2019. Commencing on January 1, 2020, every person engaged in cannabis cultivation business shall pay a cannabis business tax at the rate of six percent of gross receipts through December 31, 2022. Commencing on January 1, 2023, and continuing thereafter, every person engaged in cannabis cultivation business shall pay a cannabis business tax at the rate of seven percent of gross receipts.
(3) Commencing on January 1, 2018, every person engaged in cannabis manufacturing business shall pay a cannabis business tax at the rate of five percent of gross receipts through December 31, 2019. Commencing on January 1, 2020, every person engaged in cannabis manufacturing business shall pay a cannabis business tax at the rate of six percent of gross receipts through December 31, 2022. Commencing on January 1, 2023, and continuing thereafter, every person engaged in cannabis manufacturing business shall pay a cannabis business tax at the rate of seven percent of gross receipts.
(4) Commencing on January 8, 2021, cannabis business tax shall not be collected on the gross receipts of cannabis distribution business (the tax rate is lowered to zero percent for cannabis distribution businesses).
In addition, each such entity owing a tax must file a monthly Cannabis Business Tax Statement and remit any taxes due to the Santa Cruz County Treasurer-Tax Collector at 701 Ocean Street, Room 150, Santa Cruz, CA 95060. Please see the below links for the ordinance, the registration and the monthly statement forms.
Cannabis Business Tax Ordinance