Government, it’s often said, has never met a tax it didn’t like. But a certain tax has so irked officials in one California city that they’re refusing to collect.
In a 5-1 vote on April 26, the Vallejo City Council passed an ordinance prohibiting the collection of taxes from the city’s medical marijuana dispensaries. With Tuesday’s vote, the potential revenue stream—made possible by voter-approved Measure C—will be delayed until October 2015 or until a regulatory scheme for cannabis dispensaries is put into place.
Measure C was approved by 76 percent of voters in 2011 and imposes a business tax rate of 10% on marijuana dispensaries in the city. Despite the vote, the city council voted to shut down the dispensaries in January, opting to forgo the tax altogether. Marijuana business owners were dismayed when offers of $50,000 in Measure C taxes were turned down by officials at City Hall.
Measure C advocates expressed their shock at the council’s decision to double-down on the January decision.
“As a taxpayer and for someone who voted for this (Measure C) and voted for many of you, what are you thinking? Are you just thick?,” one resident asked.
Another speaker who owns a marijuana business implored the council to “collect my taxes, please!” Others said they would reluctantly pursue litigation if the matter is not resolved.
The city council is currently working on a regulatory framework which would allow a limited number of dispensaries to operate. It is expected to vote on the proposed regulatory ordinance this month. Meanwhile, on Monday, the city filed lawsuits challenging two other proposed medical marijuana dispensary ballot initiatives bolstering Measure C.
Read more about controversy over Vallejo’s medical marijuana dispensaries rules here.