Santa Barbara County, California to Implement ‘Death Penalty’ Tax Rule

Santa Barbara County officials are tightening rules to force cannabis businesses to pay taxes. On June 27, the Santa Barbara County Board of Supervisors approved tougher penalties for cannabis businesses who fail to pay their taxes on time.

Beginning in August, cannabis businesses in Santa Barbara County, Calif., can lose their operating licenses if they fail to pay quarterly taxes or submit proper documentation within a 30-day grace period.

“It’s that serious,” County Deputy Sheriff Brittany Orderman told the oversight board. June 27 meeting. “It’s late. …I can’t update.”

Regulators have unanimously voted to approve measures to increase penalties for cannabis license holders as a way to mitigate increasing defaults through timely payments and filing of reports.

The problem of unpaid taxes is rife in the county, which is not surprising given that. Less than a quarter of U.S. cannabis businesses are profitableAccording to Whitney Economics.

Santa Maria Sun report while it is June 6 cannabis rallyCounty officials reported that 12 businesses had not filed their third quarter tax returns by April 30. The three operators filed him from April 30th to June 6th. At that meeting, the regulator called on officials to tighten penalties and consequences for timely tax reporting and payments. , the last day of January, April, July, and October.

Santa Barbara Supervisors Participate

Some regulators disagreed with introducing tougher penalties.

“This is not the way taxes are collected in the county. “It’s like he’s a day late to the TOT. [transient occupancy tax]I have to close the hotel, and I have to leave the house if I miss the property tax even by one day. ”

He added that the regulator’s intention in calling for harsh penalties for staff was not to keep companies out of the cannabis industry.

“Our aim is to get someone to pay the tax,” he said. “I hope you can come up with something that fits the intent of what we’re trying to do.”

The county’s cannabis tax code already has a 30-day grace period built into it, which the new amendments won’t change. Orderman said that if taxes are due on January 1, businesses must pay the taxes by the due date of January 30, and must file reports accompanying those taxes on that date. said there is.

“They say if you don’t do it by January 30, you’ll get the death penalty,” Orderman said.

Some agreed that the rules were a little harsh.

“This is a standard that no one else has,” said First District Supervisor Das Williams. “Are there other options? … Can people basically pay their cannabis taxes up front and get out of this quarterly crisis? … If our goal is to improve relief and collections, Why not let people pay their taxes upfront?”

In 2020, a grand jury in Santa Barbara, Calif., issued a report criticizing cannabis regulation in the county, arguing that members of the oversight board allowed cannabis companies to determine policy, not serving the interests of county residents. . The grand jury, which acts as the oversight body for county officials, said: report It said it had received multiple requests to investigate the commission’s actions related to enacting cannabis regulations in the county.