HomeMy WebLinkAboutRes 2023-005RESOLUTION NO. 2023-005
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA, REVISING CANNABIS BUSINESS TAX RATES
WHEREAS, on October 26, 2017, the Palm Desert City Council ("City Council") of
Palm Desert ("City") approved Ordinance No. 1329 allowing for commercial cannabis
related land -uses including cultivation, manufacturing, testing and research, distribution,
delivery, and retail sales of cannabis within the City; and
WHEREAS, on December 13, 2018, the City Council at a regularly held City
Council meeting adopted Resolution No. 2018-61 calling for the placement of a General
Tax Measure on the ballot for the November 6, 2018, General Municipal Election for the
submission to qualified voters of a proposed ordinance establishing a tax on cannabis
businesses operating within the City of Palm Desert ("Cannabis Tax Measure"); and
WHEREAS, the Cannabis Tax Measure passed by a majority vote of the People
on November 6, 2018; and
WHEREAS, the Cannabis Tax Measure added Chapter 3.50 Cannabis Business
Tax to the City of Palm Desert Municipal Code ("Municipal Code"); and
WHEREAS, Municipal Code Chapter 3.50 provides that tax rates can be set at a
maximum of (1) twenty dollars ($20) per square foot of space utilized in connection with
cannabis cultivation business, (2) three ($0.03) cents for each one dollar ($1) of gross
receipts, or a fractional part thereof, for cannabis manufacturing businesses, and (3)
fifteen ($0.15) cents for each one dollar ($1) of gross receipts, or a fractional part thereof
for cannabis retail businesses; and
WHEREAS, as allowed by Proposition 218, Municipal Code Chapter 3.50 further
provides that the City Council may impose the tax detailed above at a lower rate without
a vote of the People; and
WHEREAS, at the regularly held City Council meeting on December 13, 2018, the
City Council adopted the tax rates at (1) thirteen dollars ($13) per square foot of space
utilized in connection with cannabis cultivation businesses, (2) two ($0.02) cents for each
dollar ($1) of gross receipts for cannabis manufacturing businesses, and (3) ten ($0.10)
cents for each dollar ($1) of gross receipts for cannabis retail businesses; and
WHEREAS, at the regularly held City Council meeting on December 13, 2018, the
City Council agreed to set Initial cannabis business tax rates by adoption of Resolution
2018-61 in the event the Cannabis Tax Measure passed; and
WHEREAS, at the regularly scheduled City Council meeting held on December
13, 2018, City Council adopted Ordinance 1339 incorporating tax rates for Cannabis
Businesses; and
Resolution No. 2023-005 Page 2
WHEREAS, the City Council now wishes to revise the adopted tax rates for
cannabis businesses operating within the City by Resolution; and
WHEREAS, over the last two years the cannabis industry has seen a decrease in
sales due to over saturation; and
WHEREAS, cannabis operators in the City have voiced their concern and have
advocated for a decrease in City tax rates, as these are in addition to the excise tax rates
already set and approved by State of California
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm
Desert, California, as follows:
SECTION 1. Incorporation of Recitals. The Recitals set forth above are true and
correct and are incorporated into this Resolution by this reference.
SECTION 2. Cannabis Business Tax Rates. Pursuant to Section 3.50.030 and
3.50.050 of the Municipal Code, the City Council of the City of Palm Desert hereby sets
the tax rates for cannabis businesses as follows:
A. Ten dollars ($10) per square foot of space utilized in connection with
cannabis cultivation businesses.
B. Two ($0.02) cents for each $1.00 of gross receipts for cannabis
manufacturing businesses; and
C. Five ($0.05) cents for each $1.00 of gross receipts for cannabis retail
businesses.
SECTION 3. CEQA. The City Council hereby finds and determines that this
Resolution relates to organizational or administrative activities of governments that will
not result in direct or indirect physical changes in the environment, and therefore is not a
project within the meaning of the California Environmental Quality Act ("CEQA") and the
State CEQA Guidelines, Section 15378(b)(5).
SECTION 4. Severability. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of the Resolution which can be given effect without the invalid
provision or application, and to this end the provisions of this Resolution are
severable. The City Council hereby declares that it would have adopted this Resolution
irrespective of the invalidity of any particular portion thereof.
Resolution No. 2023-005 Page 3
SECTION 5. Effective Date of Resolution. This Resolution shall take effect March
1, 2023.
ADOPTED ON FEBRUARY 16, 2023.
ICaagee yea
Kathleen Kelly (Feb 17. 2023 0 :46 PST)
KATHLEEN KELLY
MAYOR
ATTEST:
AnthSny Me) eh 1Y 2023 09:50 PST)
ANTHONY J. MEJIA
CITY CLERK
I, Anthony J. Mejia, City Clerk of the City of Palm Desert, hereby certify that
Resolution No. 2023-005 is a full, true, and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Desert on February 16, 2023, by
the following vote:
AYES: HARNIK, NESTANDE, QUINTANILLA, TRUBEE, AND KELLY
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
RECUSED: NONE
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Desert, California, on Feb 17, 2023
AnthSny Mej7 h 1Y, 2023 09:50 PST)
ANTHONY J. MEJIA
CITY CLERK
Res 2023-005 - Revised Cannabis Tax Rates
Final Audit Report
2023-02-17
Created: 2023-02-17
By: Niamh M. Ortega (nortega@palmdesert.gov)
Status: Signed
Transaction ID: CBJCHBCAABAAU4rTBTsP7NU7hkweg1jAJwXVfOcWMAX9
"Res 2023-005 - Revised Cannabis Tax Rates" History
Document created by Niamh M. Ortega (nortega@palmdesert.gov)
2023-02-17 - 2:16:24 AM GMT- IP address: 64.60.5.80
Document emailed to kkelly@palmdesert.gov for signature
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Signer kkelly@palmdesert.gov entered name at signing as Kathleen Kelly
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Document e-signed by Kathleen Kelly (kkelly@palmdesert.gov)
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Document emailed to Anthony Mejia (amejia@palmdesert.gov) for signature
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