Multiple California Cities Consider Taxes on Marijuana

Voters in Oakland, Calif., recently voted to impose a business tax on marijuana sales, and other cities in California have considered similar taxes in order to address serious budget shortfalls.

The Oakland Tribune reported July 26 that other communities with medical-marijuana dispensaries, like Berkeley, San Francisco, Santa Cruz, and Los Angeles, have discussed special gross receipts taxes on marijuana-based businesses. Medical-marijuana dispensaries already typically pay payroll and sales taxes as well as license and registration fees.

“It’s just smart economics,” said San Francisco Supervisor Ross Mirkarimi. “It is a progressive tax on a widespread practice and a readily accessible product.”

Tax proposals in cities like San Francisco have been given new impetus by the Obama administration’s decision to ratchet back federal raids on medical-marijuana dispensaries in states like California.

In Los Angeles, which is home to hundreds of marijuana dispensaries, “A tax on medical marijuana could enable the city to continue providing services we might otherwise have to cut,” said city Councilwoman Janice Hahn.

A bill also is pending in the state legislature to legalize and tax marijuana, and a group of California criminal-defense attorneys is seeking to get the “Tax, Regulate and Control Cannabis Act”  on the November 2010 ballot.