Being in or adjacent to the cannabis biz right now has got to stink.
The Santa Barbara County Board of Supervisors has gotten the short end of the stink, I mean stick, for too long, and it’s taking action. During its June 27 meeting, the board voted to implement the “death penalty” for cannabis businesses that don’t file their taxes and necessary paperwork on time.
“It’s that severe,” Deputy County Executive Officer Brittany Odermann told the Board of Supervisors on June 27. “You are late. … You cannot renew.”
The change means that lollygaggers in the cannabis industry can no longer file their quarterly tax payments in one lump at the end of the year, pay a penalty, get their annual license renewal, and be on their merry way.
Now these businesses must pay what they owe the county by their January, April, July, and October deadlines or they’re out.
The supervisors were unanimous on the issue, which isn’t confined to one or two bad apples. During a June 6 cannabis update, county staff reported that 12 operators hadn’t submitted their third quarter tax report by April 30, and three operators filed between April 30 and June 6. Supervisors had already asked staff to play the heavy and motivate the industry to pay their taxes on time, which they reiterated at that meeting.
At first, 5th District Supervisor Steve Lavagnino said that staff didn’t get the message when they asked for stricter penalties.
“This is not the way that we collect taxes in the county. I think we’ve gone from a kind of slap on the wrist to a death penalty,” he said. “That would be like if you’re one day late on your TOT [transient occupancy tax], you have to shut your hotel down, or if you’re one day late on your property taxes, you gotta move out of your house.”
But the saving grace is a grace period: Everyone will still get the 30-day window to meet the deadline. So cannabis businesses have until Jan. 30, April 30, July 30, and Oct. 30 to obey.
“We’re saying if you don’t do that by Jan. 30, then there’s the death penalty,” Odermann said.
What’s most startling is that there were no public comments on the issue during the June 27 meeting. None. Maybe everyone’s busy getting an early start on their July deadline, but I doubt it. Where were the cannabis representatives?
Do ya’ll want to lose your licenses? When you were teens, did any of you listen to your parents when they threatened to take your car keys away? Did your parents follow through?
Will the county follow through? Does the county want to follow through? That’s potentially a lot of future tax revenue the county could lose if a cannabis business or five lose their licenses.
“This is a standard that, like, nobody else lives by,” 1st District Supervisor Das Williams said. “Is there any other option? … Can people essentially prepay their cannabis taxes to be out of this quarterly jeopardy? … If our goal is remedy and better collection, then why wouldn’t we allow people to pay their taxes ahead of time?”
That’s a question for the county tax collector.
In the meantime, listen up, cannabis peeps: Mom and Dad are serious on this one. You have one more chance in July to speak up before the changes take effect in August.
The Canary never got its car keys taken away. Send comments to canary@santamariasun.com.
This article appears in Jun 29 – Jul 9, 2023.