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Willows council directs staff to draft cannabis business tax ordinance with 10% cap and flexible implementation
Summary
Council asked staff to draft a cannabis business tax ordinance that would include all cannabis business types, let the council set active rates by resolution, and allow up to a 10% maximum rate; HDL projected about $400,000 a year to the city at a 5% rate but warned of cumulative tax effects.
A majority of the Willows City Council directed staff on March 10 to draft a citywide cannabis business tax ordinance that would include all types of cannabis businesses, permit the council to set active rates by resolution after voter approval, and set a maximum allowable rate of 10%.
The direction followed a presentation by Mark Lace, senior policy adviser with municipal finance consultant HDL, who told the council there are currently no licensed cannabis retailers within 30 miles of Willows and that two stores already proposed or opening in town would likely capture most sales in Glenn County. "We generally recommend retail tax rates fall in the range of 4 to 7% and a 5% initial rate is a good fit for Willows," Lace said, adding that a 5% local rate combined with other sales taxes could yield roughly $400,000 annually for the city under…
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