In a 7 to 4 vote, the San Jose City Council approved moving item 3.3.c to the November ballot!
They made one modification I recommended, adding the words “up to” before 10%.
One fun part of this initiative requires anyone who is involved in “more than five (5) working days per year”, “whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities” to have a San Jose Business Tax Certificate, and be subject to this tax.
If this passes in anyone who provides any cannabis related products to any collectives in San Jose will be required to have a business license in San Jose. I am personally in favor of this, but it will create a huge impact upon current patient provider models, and would potentially double the tax, requiring patient providers to pay the up to 10% tax in addition to the collectives.
Even “transporting” any cannabis or “any ancillary products in the City, whether or not carried on for gain or profit” will be taxed, and fall under the guidelines of this initiate. This could refer to caregivers who pick up medication for ill patients.
4.66.210 Business Tax Certificate – Required
A. There are imposed upon all persons engaged in marijuana business in the City taxes in the amounts prescribed in this Chapter and Chapter 4.76. It shall be unlawful for any person, either for him or herself or for any other person, to commence, transact or carry on any marijuana business in the City without first having procured a business tax certificate from the City under Chapter 4.76 and having paid the tax set forth therein, and without complying with any and all provisions contained in this Chapter. The carrying on of any marijuana business without complying with any and all provisions of this Chapter and Chapter 4.76, shall constitute a separate violation of this Chapter and Chapter 4.76 for each and every day that such marijuana business is so carried on.
B. The business tax certificate required to be obtained under Chapter 4.76 and the taxes required to be paid under this Chapter and Chapter 4.76 are declared to be required pursuant to the taxing power of the City of San José solely for the purpose of obtaining revenue and are not regulatory permit fees.
4.66.070 Engaged in Business
A. “Engaged in business” means the commencing, conducting, operating, managing or carrying on of a marijuana business and the exercise of corporate or franchise powers, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities.
B. A person shall be deemed engaged in business within the City if:
- Such person or person’s employee maintains a fixed place of business within the City for the benefit or partial benefit of such person;
- Such person or person’s employee owns or leases real property within the City for business purposes;
- Such person or person’s employee regularly maintains a stock of tangible personal property in the City for sale in the ordinary course of business;
- Such person or person’s employee regularly conducts solicitation of business within the City;
- Such person or person’s employee performs work or renders services in the City on a regular and continuous basis involving more than five (5) working days per year;
- Such person or person’s employee utilizes the streets within the City in connection with the operation of motor vehicles for business purposes. The foregoing specified activities shall not be a limitation on the meaning of engaged in business.
4.66.110 Marijuana Business
The term “marijuana business” means business activity including but not limited to, planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, wholesale, and/or retail sales of marijuana and any ancillary products in the City, whether or not carried on for gain or profit.
