Memorandum
Date: April 12, 2022
To: The Honorable Lake County Board of Supervisors
From: Carol J. Huchingson, County Administrative Officer
Subject: a) Discussion of Cannabis Tax Reform; and b) Consideration of Resolution Amending Cannabis Cultivation Tax Due Dates
Executive Summary:
On January 25, 2022 your Board considered multiple topics related to cannabis taxes. Your Board provided direction to suspend the pending annual cannabis tax rate increases that would be implemented pursuant to the Consumer Price Index.
Your Board provided further direction to postpone the cannabis tax payment due dates until May 15, 2022, and waive the applicable late payment penalties. A resolution implementing this direction was approved on February 1, 2022.
On March 8, 2022, your Board considered additional options regarding potential cannabis tax reforms. Your Board directed staff to begin the process of amending the cannabis tax ordinance to change the taxable area from "Cultivation Area" to "Canopy Area." This more narrowly defined area will result in an approximate 15% tax reduction, however this will vary dramatically depending upon each individual circumstance.
Today, staff proposes your Board consider, and as appropriate, take action on the following options:
1) Approve Resolution Extending Due Dates for Cultivation Tax
As noted above, your Board previously directed that staff return with a resolution authorizing a further postponement of the due date to October 31, 2022, for the 2nd installment of the 2021 cannabis cultivation tax. There was a discussion of setting new due dates going forward, with January 1st and May 1st being proposed. A resolution detailing the proposed tax due dates for implementation is attached for your consideration and approval.
2) Proposed Rate Reductions for Cultivation Tax in 2021 and 2022
Local stakeholders in the cannabis industry have alerted staff to some of the more pressing concerns that have arisen since your Board's...
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