Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Tax Policy topic
No spam. Unsubscribe anytime.
Council introduces cannabis business tax and transient-occupancy tax ordinances to boost revenue
Summary
At the June 9 meeting the council introduced ordinances to convert the cannabis community benefit fee into a voter-approved business tax (allowing up to 8% retail; 6% discussed) and to increase the transient occupancy tax (staff recommended 12%); both measures were moved for introduction and scheduled for adoption and possible placement on the ballot.
The City Council on June 9 introduced two ordinances staff said are intended to improve the city’s near-term cash flow and provide recurring revenue.
Cannabis business tax: Phil presented an ordinance to convert the city's existing negotiated community benefit fee for cannabis retailers into a voter-approved business tax. Staff said the ordinance would let the council set a retail tax up to 8% (and reduce or lower it by resolution if appropriate); a 6% rate has public support, staff said, and some businesses favor the certainty of a tax. The ordinance was introduced with a motion and will be returned for adoption and for any required ballot measures.
Transient occupancy tax (TOT): Staff also introduced an ordinance to increase the city’s TOT and to modernize its language to ensure it covers the full range of short-term lodging the state allows (including RV parks/campgrounds as appropriate). Staff recommended a 12% rate to bring Guadalupe more in line with neighboring cities and to avoid having to raise the tax after lodging developments arrive. Council directed staff to prepare the ordinance for adoption and for placement on the ballot; staff noted that ballot language will be prepared to clarify the tax would not apply to month-to-month residential leases.
Votes and next steps: Both ordinances were introduced by motion and second and were continued to the next meeting for second reading/adoption. Staff said the ordinances will not take effect unless approved by voters where ballot approval is required, and that staff will prepare ballot language and additional financial analyses ahead of the next meeting.
