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Supervisor moves to end cultivator "true up"; committee backs switch to gross‑receipts tax
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Summary
The Mendocino County General Government Committee voted unanimously to recommend the board remove the cultivation "true up" minimum and shift cultivator taxation to a 2.5% gross‑receipts model beginning in 2027, after staff said the change would reduce administrative burden and the committee debated compliance provisions.
The Mendocino County General Government Committee on a unanimous vote recommended that the Board of Supervisors eliminate the cannabis cultivation "true up" minimum and adopt a straight percent-of-gross‑receipts tax for cultivators starting in 2027.
Supervisor Amber Haschak moved the recommendation, saying the county should "eliminate the true up and we just go to the straight percent of gross receipts." Chair Karen Mulhern seconded the motion; roll call showed the motion carried unanimously among members present.
Why it matters: Committee members and several public commenters said the existing true‑up minimum unfairly burdens small cultivators who cannot meet the threshold and that a gross‑receipts approach is administratively simpler. Small‑scale growers and industry representatives described the true up as unpredictable and punitive for operators with narrow margins.
What staff said: Auditor‑Controller‑Treasurer‑Tax Collector Shamise Covington described the administrative implications, saying removing the true up "definitely is less administrative burden" because staff would not have to calculate and collect separate true‑up notices. Covington and other staff emphasized that eliminating the true up does not obviate the need for compliance mechanisms and that those compliance steps should be tied to license renewal or other enforcement tools so the county can ensure payment.
Public reaction: Several cultivators and industry advocates who spoke during public comment supported the change. Bridget Barling, a cultivator in Covelo, told the committee the true up is "unfair" to lower‑income growers who cannot reach the minimums. Multiple speakers recommended that the county consider relief for older delinquent years and suggested temporary, lower rates for 2027–28 to ease the transition for small wholesale farms.
Next steps: The committee directed staff to return a recommendation to the full Board of Supervisors; staff said scheduling is pending. The committee recorded the recommendation to the board but did not set an effective date beyond the committee's direction that the change start in 2027 and that compliance rules be developed in concert with county counsel and the tax collector's office.
