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0 <br />EXHIBIT IV <br />CITY OF SANTA ANA MEDICAL MARIJUANA AND COMMERCIAL CANNABIS BUSINESS <br />LICENSE TAXATION OVERVIEW <br />Below is a brief overview of the functions relating to the City of Santa Ana's business license taxation of <br />Medical Marijuana and Commercial Cannabis operations - Chapter 21, Article XII and Article XIII of the <br />Santa Ana Municipal Code, respectively. (Note: the tax treatment afforded both types of cannabis <br />operation - medicinal and non -medicinal - are generally similar but differ somewhat in detail between <br />the two types, and with respect to Commercial Cannabis - between categories of operations as well.) <br />Medical Marijuana <br />• Currently, the City has 24 licensed Medical Marijuana operators. <br />• All Medical Marijuana businesses are required to have an active "basic" Business License Tax <br />account, currently assessed at $2,019 annually, which is pro -ratable by quarters depending on <br />the business start date. This Annual Business "Basic" License Tax consists of: <br />0 $2,000 Base Fee (Not subject to annual CPI adjustment) <br />0 15 Registration Fee (Application Process Charge/Renewal Processing Charge) <br />o $44 SB 1168 (State) Fee <br />• Medical Marijuana business license accounts fall under the "Gross Receipts" category of <br />assessment and annual basic tax fees are assessed based on an April 1 thru March 31 fiscal <br />tax year. <br />• All Medical Marijuana businesses are also subject to a monthly gross receipts tax in addition to <br />the Annual Business License Tax Basic Fees. <br />• The monthly tax rate is 5% of the monthly gross receipts (or gross sales) as reported by the <br />Medical Marijuana operator. (Not subject to annual CPI adjustment) <br />• The monthly tax remittance is due on the last day of the month following the month for which the <br />revenue is being reported. <br />• A monthly tax form, which is automatically system generated, is sent to all Medical Marijuana <br />businesses at the beginning of each month requesting that they report the total gross sales for <br />the month prior and calculate the tax due. <br />• Any monthly tax remittance paid, postmarked or reported after the due date is subject to the <br />following cumulative penalty and interest fee structure: <br />0 1st Month's Delinquency: = $ 10.00 or 10% of the unpaid tax (whichever is greater), and <br />1 % interest on unpaid tax, plus <br />0 2nd Month's Delinquency: = $ 15.00 or 15% of the unpaid tax (whichever is greater), and <br />1 % interest on unpaid tax, plus <br />0 3rd Month's Delinquency: = $ 25.00 or 25% of the unpaid tax (whichever is greater), and <br />1 % interest on unpaid tax, plus <br />0 4th Month's Delinquency: = $ 50.00 or 50% of the unpaid tax (whichever is greater), and <br />1 % interest on the merged balance, plus <br />o An additional 1 % interest on the merged balance continuing for each month thereafter. <br />• Business License Tax accounts are contingent on having first procured the prerequisites, <br />including Certificate of Occupancy permit with the Planning & Building Agency, Regulatory <br />Safety Permit with Code Enforcement and a State Seller's Permit. (The Planning & Building <br />Agency Certificate of Occupancy and Regulatory Safety Permit fees do not represent <br />assessable business license taxes, charges, or administrative fees.) <br />City of Santa Ana RFP No. 23-165 Page 49 of 196 <br />