R114511
City Council Meeting: July 26, 2022 Santa Monica, California
RESOLUTION NUMBER 11451 (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA SUBMITTING TO THE VOTERS A MEASURE TO
ESTABLISH A COMMERICAL CANNABIS BUSINESS TAX
AND TO IMPOSE SUCH TAX ON CANNABIS BUSINESSES
OPERATING WITHIN SANTA MONICA
WHEREAS, California Government Code Sections 37101 and 37100.5
authorize the City of Santa Monica to levy a license tax, for revenue purposes, upon
business transacted in the City; and
WHEREAS, the voters of California authorized the use of cannabis for
medicinal purposes with the passage of the Compassionate Use Act of 1996
(Proposition 15), and authorized the use of cannabis for recreational purposes with
the passage of the Adult Use of Marijuana Act of 2016 (Proposition 64); and
WHEREAS, on October 24, 2017, the City Council of the City of Santa Monica
adopted Ordinance No. 2747, which established a regulatory framework for
commercial medicinal cannabis uses in Santa Monica; and
WHEREAS, every person or entity operating a commercial business in the City of
Santa Monica is required to obtain a business license and to pay the City’s business
license tax; and
WHEREAS, the City is currently processing business licenses and regulatory
permits for two medicinal cannabis retailers that expect to begin their operations in Santa
Monica this year; and
WHEREAS, the City does not impose a cannabis specific tax upon cannabis
businesses, which are currently only subject to the City’s standard business license tax
and other generally applicable municipal taxes; and
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WHEREAS, as cannabis businesses grow in number and become approved to
operate in the City, they are likely to create demands upon City services and resources;
and
WHEREAS, the City desires to impose a cannabis specific license tax upon all
cannabis businesses operating in the City, to be known as the “Cannabis Business Tax”;
and
WHEREAS, commercial nonmedicinal cannabis activities are currently prohibited
in the City of Santa Monica, and the passage of the proposed Cannabis Business Tax by
Santa Monica voters will not authorize or legalize commercial nonmedicinal cannabis
activities in Santa Monica; and
WHEREAS, the Santa Monica City Council may decide, at a later date and after
having held a public hearing, to authorize and legalize commercial nonmedicinal cannabis
business activities in the City of Santa Monica; and
WHEREAS, pursuant to California Elections Code Section 10403, the City Council
has previously requested that the County of Los Angeles consent and agree to the
consolidation of all aspects of a General Municipal Election with the Statewide General
Election scheduled for Tuesday, November 8, 2022, for the purpose of electing members
of the Santa Monica City Council, the Santa Monica Rent Control Board, the Santa
Monica-Malibu Unified School District, and the Santa Monica College Community College
District.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AND PROCLAIM AS FOLLOWS:
SECTION 1. At the General Municipal Election called for November 8, 2022, the
following measure shall be submitted to the qualified electors of the City of Santa Monica:
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Measure “__”:
Shall the measure to establish a
business tax on every licensed cannabis
business (including adult-use
nonmedicinal cannabis retailers,
distribution, manufacturing, cultivation,
laboratory testing, or any other licensed
cannabis business) and retailers of
products containing psychoactive
cannabinoids, including cannabinoids
derived from industrial hemp, up to 10%
of gross receipts on cannabis and/or
hemp-derived psychoactive products
sold in the City, which all together could
generate an estimated $3-5 million
annually until repealed, be adopted?
YES ________
NO ________
SECTION 2. That the City Clerk shall file a certified copy of this resolution with the
Board of Supervisors and with the county election department of the County of Los
Angeles.
SECTION 3. The City of Santa Monica recognizes additional costs may be
incurred by the County by reason of the addition of this measure to the ballot and agrees
to reimburse the County for any additional costs.
SECTION 4. The City Clerk shall transmit to the City Attorney, in accordance with
applicable law, a copy of the proposed measure. The City Attorney shall prepare an
impartial analysis of it, which shall not exceed 500 words in length. The impartial analysis
shall be filed by the date set by the City Clerk for the filing of primary arguments. ln
accordance with applicable law, not less than 10 calendar days before the City Clerk
submits the official election materials for printing, the City Clerk shall make a copy of all
applicable election materials available for public examination in the City Clerk's office.
SECTION 5. The City Council authorizes its members, as follows, to file written
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arguments for or against the measure described above and which is contained in Exhibit
1 to this Resolution, which Exhibit is incorporated by reference herein:
FOR:
AGAINST:
All written arguments filed by any person in favor of or against any measure,
including any rebuttal arguments, shall be accompanied by the names and signatures of
the persons submitting the argument as required by applicable law, and any names,
signatures and arguments may be filed until the time and date fixed by the City Clerk in
accordance with applicable law, after which no change may be submitted to the City Clerk
unless permitted by law.
SECTION 6. The City Clerk shall cause the text of the measure, which is contained
in Exhibit 1, together with the City Attorney impartial analysis, and any arguments for or
against the measure, as well as any rebuttal, to be mailed to all qualified voters with the
sample ballot. In addition to other notices and publications required by law, the City Clerk,
not less than forty (40) days and not more than sixty (60) days before the General
Municipal Election, shall cause the text of the measure to be published once in the official
newspaper and in each edition thereof during the day of publication. The City Clerk is
authorized to give such notices and to fix such times and dates as are required by law
or which are appropriate to conduct properly the election.
SECTION 7. The provisions of Resolution Numbers 11425 (CCS) and 11426
(CCS) are referred to and incorporated into this resolution for more particulars concerning
the conduct of General Municipal Election to be held on November 8, 2022, and in all
respects the election shall be held and conducted as provided for by applicable law. The
City Clerk is authorized and directed to procure and furnish any official ballots, notices,
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printed materials and all supplies or equipment that may be necessary in order to properly
and lawfully conduct the election.
SECTION 8. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
______________________
Douglas Sloan, City Attorney
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Exhibit 1
CITY COUNCIL PROPOSED MEASURE TO ADD CHAPTER 6.204 OF THE SANTA
MONICA MUNICIPAL CODE TO ESTABLISH A COMMERCIAL CANNABIS
BUSINESS TAX AND TO IMPOSE SUCH TAX ON CANNABIS BUSINESSES
OPERATING WITHIN SANTA MONICA
WHEREAS, California Government Code Sections 37101 and 37100.5
authorize the City of Santa Monica to levy a license tax, for revenue purposes, upon
business transacted in the City; and
WHEREAS, the voters of California authorized the use of cannabis for
medicinal purposes with the passage of the Compassionate Use Act of 1996
(Proposition 15), and authorized the use of cannabis for recreational purposes with
the passage of the Adult Use of Marijuana Act of 2016 (Proposition 64); and
WHEREAS, on October 24, 2017, the City Council of the City of Santa Monica
adopted Ordinance No. 2747 which established a regulatory framework for
commercial medicinal cannabis uses in Santa Monica; and
WHEREAS, every person or entity operating a commercial business in the City of
Santa Monica is required to obtain a business license and to pay the City’s business
license tax; and
WHEREAS, the City is currently processing business licenses and regulatory
permits for two medicinal cannabis retailers who expect to begin their operations in Santa
Monica this year; and
WHEREAS, the City does not impose a cannabis specific tax upon cannabis
businesses, which are currently only subject to the City’s standard business license tax
and other generally applicable municipal taxes; and
WHEREAS, as cannabis businesses grow in number and become approved to
operate in the City, they are likely to create demands upon City services and resources;
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and
WHEREAS, the City desires to impose a cannabis specific license tax upon all
cannabis businesses operating in the City, to be known as the “Cannabis Business Tax”;
and
WHEREAS, commercial nonmedicinal cannabis activities are currently prohibited
in the City of Santa Monica and the passage of the proposed Cannabis Business Tax by
Santa Monica voters will not authorize or legalize commercial nonmedicinal cannabis
activities in Santa Monica; and
WHEREAS, the Santa Monica City Council may decide, at a later date and after
having held a public hearing, to authorize and legalize commercial nonmedicinal cannabis
activities in the City of Santa Monica; and
WHEREAS, under applicable law, the City Council of the City of Santa Monica
must present a proposed Cannabis Business Tax to the electorate of the City of Santa
Monica for adoption by majority vote of the electorate.
NOW, THEREFORE:
SECTION 1. Chapter 6.204 CANNABIS BUSINESS TAX is hereby added to the
Santa Monica Municipal Code to read as follows:
Chapter 6.204 CANNABIS BUSINESS TAX
6.204.010 Title and Purpose.
(a) This Chapter shall be known as the “Cannabis Business Tax.”
(b) The purpose of this Chapter is to adopt a business license tax, for general
revenue purposes, pursuant to Sections 37101 and 37100.5 of the California Government
Code, upon commercial cannabis businesses that engage in business in the City of Santa
Monica. The Cannabis Business Tax is levied based upon business gross receipts. It is
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not a sales and use tax, a tax upon income, or a tax upon real property.
(c) The Cannabis Business Tax is a general tax enacted solely for general
governmental purposes of the City and not for specific purposes. All of the revenue
received by the City from the tax imposed by this Chapter shall be placed into the City’s
general fund.
6.204.020 Intent.
The intent of this Chapter is to impose a business license tax applicable to
Cannabis Businesses that operate in the City of Santa Monica, regardless of whether
such business would have been legal at the time this Chapter was adopted. Nothing in
this Ordinance shall be interpreted to authorize or permit any business activity that would
not otherwise be legal or permissible under laws applicable to the activity at the time the
activity is undertaken.
6.204.030 Definitions.
The following words and phrases shall have the meanings set forth below, which
shall govern the application and interpretation of this Chapter.
(a) “Adult-use Non-Medicinal” means the use of Cannabis or Cannabis
products by individuals twenty-one (21) years of age and older without the need for a
physician’s recommendation or prescription.
(b) “Business” shall include all activities engaged in or caused to be engaged
in within the City, including any commercial or industrial enterprise, trade, profession,
occupation, vocation, or livelihood, whether or not carried on for gain or profit, but shall
not include the services rendered by an employee to their employer.
(c) “Business License Tax” refers to the “Business License Fee” or business
license tax set forth in Chapters 6.04, 6.08, and 6.12 of the Code.
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(d) “Cannabis” means all parts of the Cannabis sativa Linnaeus, Cannabis
indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin,
whether crude or purified, extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin.
"Cannabis" also means the separated resin, whether crude or purified, obtained from
Cannabis. Cannabis does not include the mature stalks of the plant, fiber produced from
the stalks, oil or cake made from the seeds of the plant, any other compound,
manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin
extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is
incapable of germination. For the purpose of this Chapter, Cannabis shall also include
“industrial hemp” or “hemp” products or products containing psychoactive cannabinoids,
including cannabinoids derived from industrial hemp.
(e) “Cannabis Business” means any commercial activity involving Cannabis,
including but not limited to cultivating, transporting, distributing, manufacturing,
compounding, converting, processing, preparing, storing, packaging, delivering, testing,
dispensing, retailing and wholesaling of Cannabis or Cannabis products, whether or not
carried on for gain or profit.
(f) “Cannabis Business Tax” or “Tax” means the tax due pursuant to this
Chapter 6.204 for operating a Cannabis Business in Santa Monica or otherwise engaging
in commercial Cannabis activity within in the City.
(g) “Cannabis product” means raw Cannabis that has been transformed into a
concentrate, an edible product, or a topical product. It also means marijuana products as
defined by Section 11018.1 of the California Health and Safety Code and is not limited to
medical Cannabis products.
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(h) "Canopy" means all areas occupied by any portion of a cannabis plant
whether contiguous or noncontiguous on any one site. When plants occupy multiple
horizontal planes (as when plants are placed on shelving above other plants) each plane
shall be counted as a separate canopy area.
(i) “City” means the City of Santa Monica.
(j) “Code” means the Santa Monica Municipal Code.
(k) “Cultivation” means any commercial activity involving the planting, growing,
harvesting, drying, curing, grading, or trimming of Cannabis and includes, but is not
limited to, the operation of a nursery.
(l) “Delivery” means the commercial transfer of Cannabis or Cannabis
products to a customer. “Delivery” also includes the use by a retailer of any technology
platform owned and controlled by the retailer.
(m) "Director” means the Director of Finance for the City of Santa Monica or the
Director of Finance’s designee(s).
(n) “Distribution” means the procurement, sale, and transport of Cannabis and
Cannabis products between persons engaged in commercial Cannabis activity.
(o) "Employee" means each and every person engaged in the operation or
conduct of any business, whether as owner, member of the owner's family, partner,
associate, agent, manager or solicitor, and each and every other person employed or
working in such business for a wage, salary, commission, barter or any other form of
compensation.
(p) “Engaged in business” means the commencing, conducting, operating,
managing, or carrying on of a Cannabis Business, whether done as an owner, or by
means of an officer, agent, manager, employee, or otherwise, whether operating from a
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fixed location in the City or coming into the City from an outside location to engage in
such activities. A person shall be deemed engaged in business if any of the following
apply:
(1) Such person or person’s employee maintains a fixed place of
business within the City for the benefit or partial benefit of such person;
(2) Such person or person’s employee owns or leases real property
within the City for business purposes;
(3) 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;
(4) Such person or person’s employee regularly conducts solicitation of
business within the City; or
(5) Such person or person’s employee performs work or renders
services in the City.
(6) The foregoing specified activities shall not be a limitation on the
meaning of “engaged in business”.
(q) “Evidence of doing business” means evidence such as, without limitation,
use of signs, circulars, cards or any other advertising media, including the use of internet
or telephone solicitation, or representation to a government agency or to the public that
such person is engaged in business in the City for the purpose of operating a Cannabis
Business.
(r) "Gross receipts" shall include the total of amounts actually received or
receivable from all sales and the total of amounts actually received or receivable for the
performance of any act or service, of whatever nature it may be, for which a charge is
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made or credit allowed, whether or not such act or service is done as a part of or in
connection with the sale of materials, goods, wares, or merchandise. Included in "gross
receipts" shall be all receipts, cash, credits and property of any kind or nature, without
any deduction therefrom on account of the cost of the property sold, the cost of the
materials used, labor or service costs, interest paid or payable, or losses, or other
expense whatsoever. Excluded from "gross receipts" shall be the following:
(1) Cash discounts allowed and taken on sales;
(2) Any tax required by law to be included in or added to the purchase
price and collected from the consumer or purchaser;
(3) Such part of the sale price of property returned by purchasers upon
rescission of the contract of sale as is refunded either in cash or by credit;
(4) Whenever there are included within the gross receipts amounts
which reflect sales for which credit is extended and such amount proved
uncollectible in a subsequent year, those amounts may be excluded from
the gross receipts in the year they prove to be uncollectible; provided,
however, if the whole or portion of such amounts excluded as uncollectible
are subsequently collected they shall be included in the amount of gross
receipts for the period when they are recovered; and
(5) Receipts of refundable deposits, except that such deposits when
forfeited and taken into income of the business shall not be excluded.
(s) “Industrial Hemp” or “Hemp” means an agricultural product, whether
growing or not, that is limited to types of the plant Cannabis sativa L. and any part of that
plant as defined in Section 81000 of the State Food & Agricultural Code or Section
11018.5 of the State Health & Safety Code.
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(t) “Manufacturer” means a person that conducts the production, propagation,
compounding, blending, extracting, infusing, or otherwise causes to be prepared a
Cannabis product. A person engaged in light manufacturing is a Manufacturer for
purposes of this Chapter 6.204.
(u) “Marijuana” means Cannabis, as that term is defined in this Chapter 6.204.
(v) “Medicinal Use” means the use of Cannabis or Cannabis products pursuant
to a physician’s recommendation or prescription to treat a medical condition.
(w) "Person" means an individual, firm, partnership, joint venture, association,
corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or
any other group or combination acting as a unit, whether organized as a nonprofit or for-
profit entity, and includes the plural as well as the singular number.
(x) “Sale” means any sale, exchange, or barter or other transaction for any
consideration.
(y) “State” means the State of California.
(z) "Testing Laboratory" means a Cannabis Business that: (i) offers or performs
tests of Cannabis or Cannabis products; (ii) offers no service other than such tests; (iii)
sells no products, excepting only testing supplies and materials; (iv) is accredited by an
accrediting body that is independent from all other persons involved in the cannabis
industry in the state; and (v) is registered with the State Department of Public Health.
6.204.040 Tax Imposed.
(a) Upon the effective date of this Chapter there is established and imposed
upon each person who is engaged in business as a Cannabis Business an annual
Cannabis Business Tax at the rates set forth in this Chapter. Such Tax is payable
regardless of whether the business has been issued a permit and is operating lawfully in
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the City, or is operating unlawfully. The City’s acceptance of payment of the Cannabis
Business Tax required herein from a Cannabis Business operating unlawfully in the City
shall not constitute the City’s approval or consent to such unlawful operations.
(b) Adult-Use Non-Medicinal Cannabis Retailers. The Cannabis Business
Tax upon every person who engages in business as a retailer of Adult-use Non-Medicinal
Cannabis or Adult-use Non-Medicinal Cannabis products shall be at the tax rate of three-
percent (3%) of the gross receipts derived from the retail sale of Adult-use Non-Medicinal
Cannabis or Adult-use Non-Medicinal Cannabis products. Such tax rate may increase or
decrease by resolution adopted by the City Council but shall not exceed the maximum
tax rate of ten percent (10%) without voter approval.
(c) Medicinal Cannabis Retailers. The Cannabis Business Tax upon every
person who engages in business as a retailer of Medicinal Cannabis or Medicinal
Cannabis products shall be at the tax rate of two-percent (2%) of the gross receipts
derived from the retail sale of Medicinal Cannabis or Medicinal Cannabis products. Such
tax rate may increase or decrease by resolution adopted by the City Council but shall not
exceed the maximum tax rate of ten percent (10%) without voter approval.
(d) Distribution, Manufacturing, Cultivation, or Laboratory Testing. The
Cannabis Business Tax upon every person who engages in business and where such
business primarily involves the distribution, or the manufacturing, or the cultivation, or
laboratory testing of Cannabis or Cannabis products, shall be at the tax rate of one-
percent (1%) of the gross receipts derived from such distribution, manufacturing,
cultivation, or laboratory testing of Cannabis or Cannabis products. Such tax rate may
increase or decrease by resolution adopted by the City Council but shall not exceed the
maximum tax rate of 10 percent (10%) without voter approval.
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6.204.050 Exemptions.
The provisions of this Chapter shall not apply to personal Cannabis cultivation as
defined in the Medicinal and Adult Use Cannabis Regulation and Safety Act. This Chapter
shall not apply to personal use of Cannabis that is specifically exempted from state
licensing requirements, that meets the definition of personal use or equivalent terminology
under state law, and for which the individual receives no compensation whatsoever
related to that personal use.
6.204.060 Reporting and Remittance of Tax.
The Cannabis Business Tax established under this Chapter shall be imposed and
payable on an annual basis, and shall be subject to arrears, and collected by the Director
in a manner consistent with the following:
(a) Each Cannabis Business shall, on or before June 30th of each fiscal year,
prepare and submit a tax statement on the form prescribed by the Director and remit to
the Director the Cannabis Business Tax due.
(b) Tax statements and payments for all outstanding Cannabis Business Tax
owed to the City are immediately due and payable to the Director upon the cessation of
a Cannabis Business.
(c) The Director may, at his or her discretion, establish shorter reporting and
payment periods for any taxpayer as the Director reasonably deems necessary to ensure
collection of the Tax.
6.204.070 Penalties, Interest, and Delinquent Date
(a) Any person who fails or refuses to pay any Cannabis Business Tax required
to be paid pursuant to this Chapter on or before the due date shall pay penalties as
follows:
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(1) A penalty of twenty percent of the Cannabis Business Tax due, in
addition to the amount of the Tax, who fail to pay the Cannabis Business
Tax prior to September 1st (“Delinquent Date”).
(2) An additional penalty of ten percent of the Cannabis Business Tax
due shall be added for each month or portion thereof that said Tax remains
unpaid after the Delinquent Date. In no case, however, shall the penalty
exceed one hundred percent of the original Cannabis Business Tax due.
(b) To the extent permitted by law, the Director may establish rules and
regulations that establish an applicable interest rate. The Director of Finance shall have
the power to reduce or waive any penalty or interest applicable under this Chapter so long
as such reduction or waiver is in writing and in compliance with any City-issued rules or
regulations concerning this Chapter. Any request for reduction or waiver of any penalty
or interest assessed pursuant to this Chapter shall be made in writing no later than thirty
days following the assessment of such penalty or interest.
(c) Whenever a check or electronic payment is submitted in payment of a
Cannabis Business Tax and the payment is subsequently returned unpaid by the bank,
the taxpayer will be liable for the Tax amount due plus any fees, penalties, and interest
as provided for in this Chapter, and any other amount allowed under State law.
6.204.080 Administration of the Tax.
(a) It shall be the duty of the Director to collect the taxes, penalties, interest,
and fees provided for herein, and to perform the duties required by this Chapter.
(b) For purposes of the administration and enforcement of this Chapter, the
Director may from time to time promulgate such administrative interpretations, rules, and
procedures consistent with the purpose, intent, and express terms of this Chapter as he
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or she deems reasonably necessary to implement or clarify such provisions or aid in
enforcement, including but not limited to:
(1) Provided to all Cannabis Business taxpayers forms for the reporting
of the Tax;
(2) Provide information to any taxpayer concerning the provisions of this
Chapter;
(3) Receive and record all taxes remitted to the City as provided in this
Chapter;
(4) Maintain records of taxpayer reports and taxes collected pursuant to
this Chapter;
(5) Assess penalties and interest to taxpayers pursuant to this Chapter;
(6) Determine amounts owed and enforce collection pursuant to this
Chapter; and
(7) Identify a designee of the Director for any section of this Chapter
referring to the Director.
(c) The Director may as a courtesy send a tax notice to the Cannabis Business.
However, the Director is not required to send a delinquency or other notice or bill to any
person subject to the provisions of this Chapter. Failure to send such notice or bill shall
not affect the validity of any tax or penalty due under the provisions of this Chapter.
6.204.090 Right of Appeal.
The procedure for challenging a Business License Tax, as provided in Chapter
6.16 of the Code, shall apply to the Cannabis Business Tax established by this Chapter.
Subject to the limitations provided in Chapter 6.16, any appeal relating to a Cannabis
Business Tax must be taken within the time and manner set forth in Chapter 6.16.
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6.204.100 Constitutionality and Legality.
This Tax is intended to be applied in a manner consistent with the Constitution of
the United States and the Constitution of California and California law. None of the tax
provided for by this Chapter shall be applied in a manner that causes an undue burden
upon interstate commerce, a violation of the equal protection or the due process clauses
of the Constitutions of the United States or California, or a violation of any other provision
of California law. If a person believes that the Cannabis Business Tax, as applied to him
or her, is impermissible under applicable law, he or she may request that the Director
release him or her from the obligation to pay the impermissible portion of the Tax.
6.204.110 Apportionment.
If a Cannabis Business subject to the tax required under this Chapter is operating
both within and outside the City, it is the intent of the City to apply the Cannabis Business
Tax so that the measure of the Tax fairly reflects the proportion of the taxed activity
actually carried on in the City. To the extent federal or State law requires that any tax
due from any taxpayer be apportioned, the taxpayer may indicate said apportionment on
his or her tax return. The Director may promulgate administrative procedures for
apportionment as he or she finds reasonably useful or necessary.
6.204.120 Audit and Examination of Records and Equipment.
(a) For the purpose of ascertaining the amount of Cannabis Business Tax
owed, or verifying any representations made by any taxpayer to the City in support of his
or her tax calculation, the Director shall have the power to inspect any location where
commercial Cannabis activity occurs and to audit and examine all books and records
(including, but not limited to bookkeeping records, State and federal income tax returns,
and other records relating to the gross receipts of the business) of persons engaged in
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Cannabis Business. In conducting such investigation, the Director shall have the power
to inspect any equipment, such as computers or point of sale machines, that may contain
such records.
(b) It shall be the duty of every person liable for the collection and payment to
the City of any tax imposed by this Chapter to keep and preserve, for a period of at least
five (5) years, all records as may be necessary to determine the amount of such tax as
he or she may have been liable for the collection of and payment to the City, which records
the Director shall have the right to inspect at all reasonable times.
6.204.130 Payment of Tax Does not Authorize Unlawful Business.
(a) The payment of a Cannabis Business Tax required by this Chapter, and its
acceptance by the City, shall not entitle any person to carry on any Cannabis Business
unless the person has complied with all of the requirements of this Code and all other
applicable State laws.
(b) No Tax paid under the provisions of this Chapter shall be construed as
authorizing the conduct or continuance of any illegal or unlawful business, or any
business in violation of any local or State law.
6.204.140 Other Licenses, Permits, Taxes, Fees, or Charges.
(a) Nothing contained in this Chapter shall be deemed to repeal, amend, be in
lieu of, replace or in any way affect any requirements for any permit or license required
by, under or by virtue of any other provision of this Code or any other ordinance or
resolution of the City Council, nor be deemed to repeal, amend, be in lieu of, replace or
in any way affect any tax, fee, or other charge imposed, assessed or required by, under
or by virtue of any other provision of this Code or any other ordinance or resolution of the
City Council. Any references made or contained in any other Chapter of this Code to any
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licenses, license taxes, fees, or charges, or to any schedule of license fees, shall be
deemed to refer to the licenses, license taxes, fees or charges, or schedule of license
fees, provided for in other Chapter of this Code.
(b) Notwithstanding subsection (a) of this Section, a Business subject to the
Cannabis Business Tax shall not be required to pay the Business License Tax required
by Section 6.12.010 of Chapter 6.12 of this Code, solely with respect to business activities
that are subject to the Cannabis Business Tax. A Business that engages in activities that
are subject to the Cannabis Business Tax and activities that are not subject to the
Cannabis Business Tax must: (1) obtain business licenses for each location or business
activity as provided in Chapter 6.04 of the Code; and (2) pay the Business License Tax,
as applicable, to the activities that are not subject to the Cannabis Business Tax.
6.204.150 Deficiency Determinations.
(a) If the Director is not satisfied with the return or returns of Cannabis Business
Taxes, or the amount of the taxes paid to the City by any person, the Director may
compute and determine the amount required to be paid upon the basis of the facts
contained in the return or returns or upon the basis of any information within the Director’s
possession or that may come into the Director’s possession. One or more deficiency
determinations may be made of the amount due for one or more than one period. The
amount of each deficiency determination is immediately due and payable. Each
determination shall become final and delinquent one calendar month after notice thereof
as herein provided. The Director shall give written notice of a deficiency determination to
each person against whom a determination is made. The notice may be served
personally, electronically, or by US mail. In case of service by mail of any notice required
by this Chapter, the service is complete at the time of deposit in the mail.
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(b) If any person fails or refuses to make, within the time provided in this
Chapter, any return or payment of said tax or any portion thereof required by this Chapter,
or makes a fraudulent return or otherwise willfully attempts to evade this Chapter, the
Director shall proceed in such manner as he or she may deem best to obtain facts and
information on which to estimate the taxes due. As soon as the Director procures facts
and information upon which to base the assessment of any tax imposed by this Chapter,
the Director shall determine and assess against such person the taxes, interest and
penalties provided for by this Chapter. When such a determination is made, the Director
shall give written notice of the amount so assessed. Such determination and notice shall
be made and mailed within three years after discovery by the Director of any fraud, intent
to evade, or failure to file a return. The amount of each deficiency determination is
immediately due and payable. Any determination shall become final and delinquent one
calendar month after notice thereof as herein provided.
(c) If the Director believes that the collection of any Cannabis Business Tax will
be jeopardized by delay, or if any determination will be jeopardized by delay, the Director
shall thereupon make a determination of the taxes due. The amount determined is
immediately due and payable. If the amount specified in the determination is not paid
within ten (10) days after service of notice thereof upon the person against whom the
determination is made, the amount becomes final and delinquent, and the delinquency
penalty or penalties and the interest provided in Section 6.204.070 shall attach to the
amount of the taxes, unless a petition for redetermination is filed within the ten (10) days.
6.204.160 Redeterminations.
(a) Any person directly interested may request a redetermination within one
calendar month after service of notice thereof. If a request for redetermination is not filed
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within the applicable period, the determination becomes final and delinquent at the
expiration of the period.
(b) If a request for redetermination is made within the applicable period, the
Director shall reconsider the determination, and, if the person has so requested in their
petition, shall grant the person an oral hearing and shall give the person ten days’ notice
of the time and place of the hearing. The Director may continue the hearing from time to
time as may be necessary.
(c) The Director may decrease or increase the amount of the determination
before it becomes final but the amount may be increased only if a claim for the increase
is asserted by the Director at or before the hearing.
(d) The decision of the Director upon a petition for redetermination becomes
final and delinquent fifteen days after service upon the petitioner of notice thereof.
6.204.170 Failure to Report; Nonpayment; Fraud.
(a) Under any of the following circumstances, the Director may make and give
notice of an assessment of the amount of tax owed by a person under this Chapter at any
time:
(1) If the person has not filed a complete statement required under
Section 6.204.060;
(2) If the person has not paid the Cannabis Business Tax due under the
provisions of this Chapter;
(3) If the person has not, after notice from the Director, filed a corrected
statement, or furnished to the Director adequate substantiation of the
information contained in a statement already filed, or paid any additional
amount of tax due under the provisions of this Chapter; or
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(4) If the Director determines that the nonpayment of any Cannabis
Business Tax is due to fraud, a penalty of twenty-five percent (25%) of the
amount of the Tax shall be added thereto in addition to penalties and
interest otherwise stated in this Chapter and other penalties allowed by law.
(b) The notice of assessment shall separately set forth the amount of any tax
known by the Director to be due or estimated by the Director, after consideration of all
information within the Director’s knowledge concerning the business and activities of the
person assessed, to be due under each applicable section of this Chapter and shall
include the amount of any penalties or interest accrued on each amount to the date of the
notice of assessment.
6.204.180 Tax Assessment; Notice Requirements.
The notice of tax assessment in Section 6.204.170 shall be served upon the
person either by personal delivery, or by a deposit of the notice in the United States mail,
postage prepaid thereon, addressed to the person at the address of the location of the
business or to such other address as he or she shall register with the City for the purpose
of receiving notice under this Chapter; or, should the person have no address registered
with the Director for such purpose, then to such person’s last known address. For the
purposes of this Section, service by mail shall be deemed to have occurred at the time of
deposit in the mail.
6.204.190 Refunds.
(a) Whenever the amount of any Cannabis Business Tax, penalty, or interest
has been overpaid, paid more than once, or has been erroneously or illegally collected or
received by the City under this Chapter, it may be refunded to the claimant who paid the
tax provided that a written claim for refund is filed with the Director within one year of
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when the payment was made, and all applicable provisions of this Chapter are satisfied.
(b) The Director shall have the right to examine and audit all the books and
business records of the claimant for a refund under this Chapter, in order to determine
the eligibility of the claimant to the claimed refund. No claim for refund shall be allowed
if the claimant refuses to allow such examination of claimant's books and business
records after request by the Director to do so. In the event that the Cannabis Business
Tax was erroneously paid and the error is attributable to the City, the City shall refund the
amount of tax erroneously paid up to one year from when the error was identified.
6.204.200 Conviction for Violation; Taxes not Waived.
The conviction and punishment of any person for failure to pay the required
Cannabis Business Tax shall not excuse or exempt such person from any civil action for
the Tax debt unpaid at the time of such conviction. No civil action shall prevent a criminal
prosecution for any violation of the provisions of this Chapter or of any State law requiring
the payment of all taxes.
6.204.210 Violation Deemed Misdemeanor.
Any person violating any of the provisions of this Chapter shall be guilty of a
misdemeanor.
6.204.220 Remedies Cumulative and Not Exclusive.
All remedies and penalties prescribed by this Chapter, or which are available under
any other provision of the Santa Monica Municipal Code and any other provision of law
or equity, are cumulative. The use of one or more remedies by the City shall not bar the
use of any other remedy for the purpose of enforcing the provisions of this Chapter.
SECTION 2. Any provision of the Santa Monica Municipal Code inconsistent with
the provisions of this measure, to the extent of such inconsistencies and no further, is
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hereby repealed or modified to that extent necessary to effect the provisions of this
measure.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this
measure is for any reason held to be invalid or unconstitutional by a decision of any court
of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this measure. The City Council hereby declares that it would have placed this
measure and the resulting Santa Monica Municipal Code amendment, and the voters
declare that they would have adopted this measure and the resulting Santa Monica
Municipal Code amendment, and each and every section, subsection, sentence, clause,
or phrase not declared invalid or unconstitutional, without regard to whether any portion
may be subsequently declared invalid or unconstitutional.
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Adopted and approved this 26th day of July 2022.
__________________________
Sue Himmelrich, Mayor
I, Denise Anderson-Warren, City Clerk of the City of Santa Monica, do hereby
certify that Resolution No. 11451 (CCS) was duly adopted at a meeting of the Santa
Monica City Council held on the 26th day of July 2022, by the following vote:
AYES: Councilmembers Brock, De la Torre, Negrete, Parra,
Mayor Pro Tem McCowan, Mayor Himmelrich
NOES: None
ABSENT: Councilmember Davis
ATTEST:
_____________________________________
Denise Anderson-Warren, City Clerk
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