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Cloverdale staff proposes simpler cannabis tax structure to steady revenue
Summary
Staff outlined two options to simplify cannabis business fees and taxes amid first-quarter revenue at about 96% of last year—s level, and suggested folding annual permit renewal costs into the tax to reduce administrative work.
Cloverdale staff on a city committee meeting presented proposals to simplify the city—s cannabis fee and tax structure, saying first-quarter revenue was running at roughly 96% of the same period last year and that late payments are affecting collections. Staff proposed either raising the retail tax to 4.5% while keeping manufacturing at 2% or moving all cannabis business types to a single 2.5% rate.
The discussion matters because the city is trying to match the prior year—s revenue and reduce administrative burden. Staff said one option would eliminate the annual permit-renewal fee for businesses in good standing by folding those costs into the tax, which would reduce the need to chase yearly permit payments. The packet included a calculation staff said would result in about a $3,000 annual savings for a retail dispensary under one scenario; staff described that number as approximate.
Committee members recommended an ad hoc group review the proposal and then present it to the council. Staff said the packet also included an education line item of roughly $3,000 that could be removed without materially changing the proposed tax outcomes.
No formal motion or vote on the tax structure appears in the transcript; staff said the proposal would be taken to the council if the ad hoc group and committee endorse it.
