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Council keeps city cannabis retail tax at 10% after debate over revenue and competitiveness
Summary
After hearing from operators and reviewing revenue trends and a recent state law change on gross‑receipts tax definitions, the council voted 3-2 to retain the existing 10% cannabis retail excise rate.
The City Council voted to retain the city’s 10% cannabis retail excise tax at its March 25 meeting after brief public comment and extended council discussion.
Staff reminded the council that recent state legislation (Senate Bill 1059, effective Jan. 1, 2025) removed sales and use taxes from the definition of gross receipts for local cannabis taxes; city staff said Paris had already been applying a methodology consistent with the new requirement. Staff provided a survey of nearby jurisdictions and a historical revenue summary showing cannabis retail revenues grew from $781,383 in 2019 to a peak of about $5.66 million in 2021, then declined to about $3.22 million in 2024.
Principal planner Rafael Garcia and staff provided a projection table showing the fiscal impact of rate changes; staff said reducing the city retail tax from 10% to 9% would lower projected receipts by roughly $243,549 (staff projection). Several councilmembers voiced concern about slipping revenue and the risk that an aggressive local rate cut would trigger a regional “race to the bottom” in tax rates among neighboring cities.
Representatives of the local cannabis community spoke in favor of tax relief and thanked the city for earlier policy choices that eased double taxation on premises. Joshua Nagar, who has been active in the local industry, praised the city’s earlier regulatory approach and asked council to consider relief for operators.
Council deliberations split. Councilman Corona and one other member supported rate relief to help retain and attract retailers; Mayor Pro Tem Rab and Councilwoman Vallejo expressed concern about lost revenue and the budgetary impact. Councilman Corona moved to keep the rate at 10%; Councilwoman Nava seconded. On a roll call the motion passed, recorded as three votes in favor and two opposed (Vallejo, Nava and Rab recorded as yes; Corona and Mayor Vargas recorded as no in the roll call language noted in the minutes). The clerk’s roll-call statement recorded the final tally as three yes, two no and the motion carried.
Staff will continue to monitor local and regional market conditions and present revenue projections to council in upcoming budget deliberations.
