On Tuesday, September 19, the Humboldt County Board of Supervisors voted unanimously to prorate the cannabis excise tax for new cultivation sites, sites with new expansion and RRR locations, which have not initiated cultivation prior to receiving a permit from the County Planning Department.
"What this means in practical terms is that if a property owner sought a new outdoor cultivation permit and it was approved in November 2017, the owner would owe $10,000 in excises taxes for the entirety of the year. The payment would be due in January 2018 and another $5,000 in April 2018 for the first installment of 2018. This would be the case whether or not he was actually able to legally cultivate cannabis on his property in 2017, and November falls after the harvest season, said Ruth Schneider, of the Times Standard.
Under the prorated system approved Tuesday, the property owner would only be responsible for the days the permit was valid - November and December would amount to around 60 days - so the excise tax would be around $1,500 instead of $10,000 come January 2018." Existing grows will be required to pay the full year's taxes for 2017 in January 2018 if they receive a permit in October-December 2017, permits issued before October will be on the hook for the tax on their November bill.
The supervisors clarified the prorated excise taxes would not apply to those who “jumped the gun” and cultivated on the property ahead of receiving a permit. “The gun jumpers are paying a fine,” 1st District Supervisor Rex Bohn said. “If people have an existing grow and they go for a permit, they still have to pay for a full year,” 2nd District Supervisor Estelle Fennell said.
This decision was instigated after HCGA published the white paper by the County Tax Collector, which clarified the County’s intention to levy the full excise tax on all approved permits. Our membership reached out to us with their questions and concerns, we were able to share those concerns with Supervisors, Estelle Fennell, and Ryan Sundberg, and they, in turn, placed on the agenda for the entire Board to discuss whether new, expansion and RRR projects should pay a full years' worth of excise tax.
This is a tangible example of how HCGA works for our membership, and helps get results.