Title
Report regarding adoption of a resolution adjusting the cannabis business license tax rate set forth in Section 6.16.037 of the South San Francisco Municipal Code, consistent with the authority granted by the voter approved Ordinance No. 1556. (Christina Crosby, Interim Director of Finance)
label
RECOMMENDATION
Recommendation
Staff recommends the City Council adopt a resolution adjusting the cannabis business license tax set forth in Section 6.16.037 of the South San Francisco Municipal Code, consistent with the authority granted by the voter approved Ordinance No. 1556.
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BACKGROUND/DISCUSSION
On November 7, 2018, a majority of the City's voters approved Ordinance No. 1556 imposing an excise tax on the privilege of conducting business within the City, pursuant to Article XIIIC, section 2(b) of the California Constitution. Revenues from the cannabis business tax will be for unrestricted general revenue purposes and will go into the City's general fund and can be used for any legitimate government purpose.
A summary of the current rates by type of cannabis operation are provided in the table below:
City's
Current Rate
Consultant's Recommended Rate
Maximum Rate under Ordinance No. 1556
Testing
1%
1%
2.5%
Cultivation
1%
2%
4%
Distribution
1%
2%
3%
Manufacturing
1%
3%
5%
Delivery-Only
1%
4%
5%
All Other Operations
1%
4%
5%
The ordinance adopted Section 6.16.037 of the South San Francisco Municipal Code which established a minimum rate of one percent (1%) of gross receipts for all commercial cannabis operations with varying maximum rates of two and one-half percent (2.5%) of gross receipts for testing, three percent (3%) of gross receipts for distribution, four percent (4%) of gross receipts for cultivation, and five percent (5%) of gross receipts for manufacturing, delivery-only, and all other commercial cannabis operations. Section 6.16.037 of the South San Francisco Municipal Code further authorizes City Council to adjust by resolution or or...
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