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Last-minute pot taxation scheme raises hackles

By Josh Richman
Friday, August 27th, 2010 at 3:26 pm in California State Senate, marijuana, taxes.

An eleventh-hour legislative effort to establish a state licensing and taxation scheme for legalized marijuana has activists atwitter.

When state Sen. Ron Calderon introduced SB 1131 in February, it dealt with prohibiting the state from spending any money to film or produce commercials outside of California. But Calderon, D-Montebello, gutted and amended the bill Aug. 20 – the deadline to do so for this session – to instead create “the Cannabis Licensing Act.”

The bill now would provide for the licensure by the State Board of Equalization of growers, importers, wholesalers, retailers, and transporters of cannabis and cannabis products doing business in California. Each wholesaler would be required to prepay the retail sales tax on its gross receipts derived from the sale of cannabis and cannabis products.

It would require such licensees to keep records of every sale, transfer or delivery of cannabis or cannabis products; would authorize any peace officer and certain BOE employees to conduct inspections; and would prohibit anyone from selling or purchasing cannabis or cannabis products without a license. Cannabis or cannabis products bought or sold in violation of this law could be seized, and violators could face license revocation or suspension, civil penalties or criminal prosecution.

An Aug. 20 Assembly staff analysis of the bill says:

According to the author’s office, this bill “creates a licensing structure similar to the Tobacco Licensing Act of 2003 (Act) which imposed licensing requirements on all retailers, wholesalers, and distributors of cigarettes and tobacco products and all manufacturers and importers of cigarettes. The Act, intended to decrease tax evasion on the sales of cigarettes and tobacco products in California, also included provisions for new recordkeeping requirements, inspection and seizure of any untaxed cigarettes or tobacco products, and imposed civil and criminal penalties for violations.”

Calderon tells Capitol Weekly that his bill would help the board collect taxes on medical marijuana sales, letting the state reap up to $160 million per year it otherwise would miss. He also said it’s aimed at the existing medical marijuana industry in California, and isn’t a response to Proposition 19, the marijuana legalization measure on November’s ballot; however, much of the bill’s language applies to marijuana sales in general and likely could encompass non-medical sales if voters decide to allow them.

Dale Gieringer, executive director of the California chapter of the National Organization for the Reform of Marijuana Laws, wrote online that “SB 1131 would require all commercial growers, retailers, wholesalers, and transporters to register with the state, but would DO NOTHING to legally protect them by changing the law to explicitly legalize wholesale or retail sales. The bill would also create an extraordinary, new, complicated system to require wholesalers to pay part of the retailers’ sales tax in advance.”

Gieringer urged people to contact Assembly Rules Committee Chairwoman Nancy Skinner, D-Berkeley, through whose committee the newly amended bill must go first. “Please tell the Committee to reject Calderon’s underhanded effort to pass this ill-considered bill into law without proper hearings.”

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  • RR, Uninvited Columnist

    Holy pot-smokers, Batman! Golly, all these confusing laws getting in the way of selling marijuana!

  • AJ

    They just love the “back door” don’t they (smirk smirk)!

  • Elwood

    Members of the CA leg. have taken to telling people that they are pimps or dope dealers in order to try to gain a little prestige.