Lets cannabis businesses pay state charges in cash

(1)Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, exempts from specified criminal penalties the possession or cultivation of medical marijuana by patients and primary caregivers. The Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA) an initiative measure enacted by the approval of Proposition 64 at the November 8, 2016, statewide general election, provides for the licensure and regulation of commercial adult marijuana activities by various state agencies. The Medical Cannabis Regulation and Safety Act (MCRSA) provides for the licensure and regulation of commercial medical cannabis activity by various state entities.

This bill would enact the Cannabis State Payment Collection Law and would authorize the State Board of Equalization or a county to collect cash payments from cannabis-related businesses for a state agency that administers fees, fines, penalties, taxes, or other charges payable by a cannabis-related business, if that state agency has entered into an agreement with the board or county. This bill would require a county to collect only if both the board of supervisors of the county and the county tax collector or county treasurer-tax collector approves of entering into an agreement with a state agency to make those collections. The bill would similarly authorize the board to enter into an agreement with a county to collect cash payments from cannabis-related businesses for fees, fines, penalties, taxes, or other charges that are payable to the county. The bill would require the agreement to include specified provisions, including that the board or county transmit the collected moneys to the Treasurer to be deposited in the State Treasury to the credit of the funds or accounts in which the fees, fines, penalties, taxes, or other charges are otherwise required by law to be deposited, as specified.

For the collection by the board or a county of regulatory fees on the behalf of a state agency, or by the board of regulatory fees on behalf of a county, pursuant to an agreement, this bill would continuously appropriate to the board or county an amount equal to the amount necessary for its costs of collection, not to exceed 10% of the amounts collected, from the funds or accounts in which those regulatory fees are to be deposited. For the collection by the board or a county of fines, penalties, taxes, or other charges on behalf of a state agency, or by the board on behalf of a county, pursuant to an agreement, the bill would require the board or county to be reimbursed for its costs of collection from the funds or accounts in which those fines, penalties, taxes, or other charges are to be deposited, not to exceed 10% of the amounts collected, upon appropriation by the Legislature.

This bill would also allow a state agency that enters into an agreement with the board or a county, or a county that enters into an agreement with the board, to impose a cash collection fee in an amount reasonably necessary to recover the collection costs to be incurred by the board or county in dealing with cash payments, not to exceed 10% of any amounts collected. The bill would require the cash collection fee to be determined by the state agency that entered into the agreement, or by the county that entered into the agreement, as applicable, and would require any cash collection fees to be deposited into the funds or accounts in which the fees, fines, penalties, or other charges to be collected are deposited.

(2)The Sales and Use Tax Law, which is administered by the State Board of Equalization, requires any person whose estimated tax liability averages $10,000 or more per month to remit amounts due by electronic funds transfer, but provides an exception to that requirement that authorizes, before January 1, 2022, a person issued a seller’s permit for a place of business that is a dispensary, as defined in MCRSA, to remit amounts due for retail sales at the dispensary by a means other than electronic funds transfer.

Cities, counties, and specified local governmental agencies are authorized to impose sales and use taxes in modified conformity to state sales and use taxes, which are administered and collected by the board on behalf of those agencies pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or in accordance with the Transactions and Use Tax Law.

AUMA, commencing January 1, 2018, imposes an excise tax on the purchase of marijuana and marijuana products, as defined, and a separate cultivation tax on marijuana that enters the commercial market. AUMA provides for the administration of both taxes by the board and requires persons required to be licensed involved in the cultivation and retail sale of marijuana or marijuana products to file a return with the board by a specified date.

This bill would authorize a cannabis-related business, as defined, to remit any amount due under any of the provisions described above to the board by means other than electronic funds transfer, including by the use of cash.

The bill, by January 1, 2019, would require the board to accept cash as a form of remittance from a cannabis-related business for any fee, tax, fine, penalty, interest, or any other charge that the business owes under the laws described above, including the Cannabis State Payment Collection Law, and that business would be authorized by those laws to remit to the board in cash, in at least 50% of the offices managed by the board in each equalization district of the state. The bill, by January 1, 2020, would further require the board to accept cash as a form of remittance for those payments in at least 75% of the branch or district offices managed by the board in each equalization district of the state.