HomeMy WebLinkAbout09023ORDINANCE NO. 9023
AN ORDINANCE SUBMITTING TO THE ELIGIBLE ELECTORS
OF THE CITY OF PUEBLO, COLORADO AT THE SPECIAL
MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2016, A
BALLOT QUESTION TO INCREASE TAXES BY IMPOSING AN
ADDITIONAL SALES AND USE TAX OF 4.3 % ON THE SALE OF
RETAIL MARIJUANA AND RETAIL MARIJUANA PRODUCTS,
WITH THE RATE OF THE TAX BEING ALLOWED TO BE
DECREASED OR INCREASED BY CITY COUNCIL WITHOUT
FURTHER VOTER APPROVAL, SO LONG AS THE RATE OF THE
TAX DOES NOT EXCEED 15.0 % AND THE ADOPTION OF
ORDINANCE NO. 9008 TO IMPLEMENT THE NEW TAXES
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The question of adopting Ordinance No. 9008 and thereby imposing an additional sales
and use tax on the sale of retail marijuana and retail marijuana products shall be submitted to a
vote of the eligible electors of the City at the City's special municipal election to be held on
November 8, 2016. The ballot question (submission clause and title) therefore shall be as follows:
Question No. 2C (Retail Marijuana Stores Taxes)
SHALL THE CITY OF PUEBLO'S TAXES BE INCREASED BY $923,000
ANNUALLY (FIRST FULL FISCAL YEAR INCREASE) BEGINNING JANUARY 1,
2017 AND BY WHATEVER AMOUNTS ARE RAISED ANNUALLY
THEREAFTER, THROUGH THE ADOPTION OF ORDINANCE NO. 9008
IMPOSING AN ADDITIONAL SALES AND USE TAX OF 4.3 % ON THE SALE OF
RETAIL MARIJUANA AND RETAIL MARIJUANA PRODUCTS, WITH THE RATE
OF THE TAX BEING ALLOWED TO BE DECREASED OR INCREASED BY CITY
COUNCIL WITHOUT FURTHER VOTER APPROVAL, SO LONG AS THE RATE
OF THE TAX DOES NOT EXCEED 15.0 % AND SHALL ALL REVENUES
DERIVED FROM SUCH TAXES BE COLLECTED, RETAINED AND SPENT,
NOTWITHSTANDING ANY LIMITATIONS PROVIDED BY LAW, AS A VOTER
APPROVED REVENUE CHANGE AND AN EXCEPTION TO THE LIMITS WHICH
WOULD OTHERWISE APPLY PURSUANT TO ARTICLE X, SECTION 20 OF
THE COLORADO CONSTITUTION OR ANY OTHER LAW AND ALLOWING
SUCH REVENUE TO BE EXPENDED AS THE CITY COUNCIL SHALL
DETERMINE?
YES _____
NO _____
The text of Ordinance No. 9008 is as follows:
BE IT ORDAINED BY THE PEOPLE OF THE CITY OF PUEBLO, that (brackets indicate
matter being deleted; underscoring indicates new matter being added):
SECTION 1.
Title XIV of the Pueblo Municipal Code, as amended, is hereby amended by the addition
of a new Chapter 13 to read as follows:
CHAPTER 13
Retail Marijuana Sales Tax
Sec. 14-13-1. Definitions.
The following definitions shall apply to the words and phrases used in this
Chapter:
(1) means a natural person, partnership, sole-
Person
proprietorship, association, corporation, limited liability company, estate,
receiver, trustee, assignee, lessee or any individual acting in a
representative capacity or any other combination of individuals by whatever
name known.
(2) means all or parts of the plant of the genus
Retail marijuana
cannabis whether growing or not, the seeds thereof, the resin extracted from
any part of the plant and every compound, manufacture, salt, derivative,
mixture, or preparation of the plant, its seeds, or its resin, including
marijuana concentrate. “Retail marijuana” does not include industrial hemp,
nor does it include fiber produced from the stalks, oil, cake made from the
seeds of the plant, sterilized seed of the plant that is incapable of
germination, or the weight of any other ingredient combined with marijuana
to prepare topical or oral administrations, food, drink, or other product.
Retail marijuana does not include the sale of medical marijuana to any
person by a medical marijuana center.
(3) means concentrated retail marijuana
Retail marijuana products
products and retail marijuana products that are comprised of retail marijuana
and other ingredients and are intended for use or consumption, such as, but
not limited to, edible products, ointments, and tinctures. Retail marijuana
products does not include the sale of medical marijuana products to any
person by a medical marijuana center.
(4)means the sales tax imposed by this
Retail marijuana sales tax
Chapter.
Sec. 14-13-2. Imposition and Rate of Tax; Collection and Trust Status.
Retail Marijuana Sales Tax. In addition to any other tax imposed by law
including the sales and use tax levied in Chapter 4 of this Title, there is hereby levied
and there shall be collected and paid a sales tax upon all sales of retail marijuana
and retail marijuana products in the amount of four and three-tenths percent (4.3%)
of the full purchase price paid or charged. Any person who sells marijuana or any
marijuana product to a consumer shall collect the retail marijuana sales tax from
the person paying for the retail marijuana or retail marijuana product at the time it
is paid. Said tax shall be deemed to be held in trust by the person required to collect
it for the sole use and benefit of the City, until it is remitted to the Director of Finance
as herein provided.
Sec. 14-13-3. Licensing and Reporting.
(a) Every person required to collect the retail marijuana sales tax
hereunder shall obtain a sales and use tax license from the Director of Finance. The
issuance of a sales and use tax license does not authorize, and shall not be
construed to authorize, the sale of retail marijuana by any person. Each application
for said sales and use tax license shall be accompanied by a cash deposit or bond
in such amount and in such form as is determined by the Director of Finance to be
sufficient to secure compliance with all provisions of this Chapter. Said license
shall be issued and shall be valid until revoked.
(b) Every person required to collect the retail marijuana sales tax
hereunder shall be liable and responsible for the payment of an amount equivalent
to the rate of tax imposed by this Chapter on all sales made by him or her of retail
marijuana or retail marijuana products and shall, before the twentieth day of each
month, make a return to the Director of Finance for the preceding calendar month
and remit an amount equivalent to the rate of tax imposed by this Chapter on such
sales to the Director of Finance.
(c) The Director of Finance may require any person subject to this
Chapter to maintain and furnish such returns, statements and records as the
Director deems necessary to a determination of the retail marijuana sales tax
liability of such person from the best information reasonably available to him or her.
Sec. 14-13-4. Administration and enforcement.
The retail marijuana sales tax imposed pursuant to this Chapter shall be
administered and enforced in accordance with the provisions of Chapter 4 of this
Title which provisions are made applicable to this Chapter, including, without
limitation, any interest and penalty for failure to make any return or to collect or pay
any tax; except that, in the event of a conflict between the provisions of this Chapter
and the provisions of Chapter 4 of this Title, the provisions of this Chapter shall
control, including without limitation, those provisions of Chapter 4 providing for
exemption from sales and use tax which are inapplicable to this Chapter. The
burden of proving that any transaction is not subject to the taxes imposed by this
Chapter shall be upon the person upon whom the duty to collect the tax is imposed.
Sec. 14-13-5. Rules and regulations.
The Director of Finance is hereby authorized to adopt rules and regulations
not inconsistent with the provisions of this Chapter, regarding the payment,
collection and remittance of retail marijuana sales taxes. A copy of all such rules
and regulations shall be available for public inspection in the office of the Director
of Finance. Failure or refusal to comply with any such rules or regulations shall
constitute a violation of this Chapter.
Sec. 14-13-6. Criminal penalties for violation.
(a) It is unlawful and a municipal offense for any person to sell or offer
for sale any retail marijuana or retail marijuana product without a license as
required by law including the sales and use tax license required by this Chapter.
(b) It is unlawful and a municipal offense for any person to fail or refuse
to make any return provided to be made in this Chapter, to make any false or
fraudulent return or any false statement in any return, to fail or refuse to make
payment to the Director of Finance of any taxes collected or due the City, or in any
manner to evade the collection and payment of the tax of any part thereof imposed
by this Chapter.
(c) It is unlawful and a municipal offense for any person or purchaser to
fail or refuse to pay the tax imposed by this Chapter or evade the payment thereof,
or to aid or abet another in any attempt to evade the payment of the tax imposed by
this Chapter.
(d) It is unlawful and a municipal offense for any person to violate any
provision of this Chapter.
(e) Any person who violates any provision of this Chapter shall, upon
conviction, be punished by a fine not exceeding One Thousand Dollars ($1,000) or
imprisonment not exceeding one (1) year, or by both such fine and imprisonment,
in addition to any civil remedies or penalties which may otherwise be applicable.
Sec. 14-13-7. Maximum rate for retail marijuana sales tax.
The maximum retail marijuana sales tax rate that may be imposed pursuant
to this Chapter is fifteen (15) percent. At any time on or after January 1, 2017, the
City may, by Ordinance:
(a) Establish another retail marijuana sales tax rate to be imposed
pursuant to this Chapter that is equal to or less than the maximum fifteen
(15) percent tax rate provided in this Chapter; or
(b) After establishing a retail marijuana sales tax rate that is lower
than fifteen (15) percent, increase the tax rate to be imposed pursuant to this
Section; except that, in no event shall the City increase the retail marijuana
sales tax rate above fifteen (15) percent.
SECTION 2.
This Ordinance shall become effective upon the majority vote in favor thereof by the
registered electors of the City voting thereon at the Special Municipal Election to be held Tuesday,
November 8, 2016. The tax levies of this Chapter shall take effect beginning January 1, 2017.
SECTION 3.
The officers and staff of the City are authorized and directed to take all action necessary,
appropriate or required to effectuate the provisions of this Ordinance.
SECTION 4.
Notwithstanding any limitations on revenue, spending, or appropriations contained in
Section 20 of Article X of the Colorado Constitution or any other provision of law, any revenues
generated by the retail marijuana sales taxes imposed pursuant to this Chapter, may be collected,
retained and spent as a voter-approved revenue change and shall not require further voter
approval to modify the tax rates as provided in this Chapter or to collect, retain and spend any
revenue derived from the modified tax rates.
SECTION 5.
If any section, subsection, paragraph, clause or other provision of this Ordinance is for
any reason invalid or unenforceable, the invalidity or unenforceability of such section, subsection,
paragraph or clause or other provision shall not affect any of the remaining provisions of this
Chapter.
SECTION 6.
In addition to the authority provided in Section 1 of this Ordinance to establish a different
retail marijuana sales tax rate, the City Council, notwithstanding Sec. 18-5 of the City Charter, is
hereby empowered to amend by ordinance any other portion of Chapter 12 of Title XIV herein
adopted in order to make uniform with the laws of the State of Colorado or in order to amend or
enact additional provisions relative to the payment, collection or enforcement of the sales tax
imposed by this Ordinance.
INTRODUCED July 25, 2016
BY: Ed Brown
PASSED AND APPROVED: August 8, 2016
City Clerk’s Office Item # R-8
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: July 25, 2016
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: AN ORDINANCE SUBMITTING TO THE ELIGIBLE ELECTORS OF THE CITY
OF PUEBLO, COLORADO AT THE SPECIAL MUNICIPAL ELECTION TO BE
HELD ON NOVEMBER 8, 2016, A BALLOT QUESTION TO INCREASE TAXES
BY IMPOSING AN ADDITIONAL SALES AND USE TAX OF 4.3 % ON THE SALE
OF RETAIL MARIJUANA AND RETAIL MARIJUANA PRODUCTS, WITH THE
RATE OF THE TAX BEING ALLOWED TO BE DECREASED OR INCREASED
BY CITY COUNCIL WITHOUT FURTHER VOTER APPROVAL, SO LONG AS
THE RATE OF THE TAX DOES NOT EXCEED 15.0 % AND THE ADOPTION OF
ORDINANCE NO. 9008 TO IMPLEMENT THE NEW TAXES
SUMMARY:
Attached is a proposed Ordinance referring the retail marijuana tax ballot question to the voters
of the City of Pueblo at the November 8, 2016 special municipal election.
PREVIOUS COUNCIL ACTION:
On June 14, 2010, City Council referred a ballot measure to the electorate concerning a 4.3%
sales tax on medical marijuana and medical marijuana products. Pueblo voters approved said tax
on November 2, 2010.
On July 28, 2014, City Council referred a ballot measure to the electorate concerning an 8.0 %
excise tax and 4.3% sales tax on retail marijuana and retail marijuana products. Pueblo voters
voted against said taxes on November 4, 2014.
On July 27, 2015, City Council referred a ballot measure to the electorate concerning an 8.0 %
excise tax when unprocessed retail marijuana is first sold or transferred by a marijuana cultivation
facility. Pueblo voters approved the excise tax on November 3, 2015.
BACKGROUND
By a separate Ordinance, City Council is referring to the electors of the City of Pueblo the question
of whether retail marijuana stores should be allowed to operate within the City limits of Pueblo.
Should such ballot question pass, it is anticipated that there will be increased demands upon
municipal services associated with the sale of marijuana at retail stores located within the City of
Pueblo. Due to increased demands on the City’s limited financial resources, it has been proposed
for Council’s consideration the establishment of new sales and use taxes of 4.3 % when retail
marijuana and retail marijuana products are sold in retail marijuana stores.
The proposed Ballot Question 2C further provides that the tax rate of 4.3% may be decreased or
increased without further voter approval so long as the retail marijuana sales and use tax rate
does not exceed 15.0%.
Due to the requirements of the Taxpayers Bill of Rights ("TABOR"), Article X, §20 of the Colorado
Constitution, any new tax must be approved by the voters. This measure would refer the retail
marijuana sales and use tax question to the voters and, if approved, would also "De-Bruce" the
revenue derived from the retail marijuana sales and use tax (i.e., exempt it from the revenue
growth and spending limitations of TABOR).
FINANCIAL IMPLICATIONS:
The amount of tax revenue that the measure will generate is subject to speculation; however, for
the purpose of ballot submission under TABOR, it has been assumed that the new sales and use
tax in the first year will not exceed $923,000.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Members of the public are the primary stakeholders affected by the proposed Ordinance. The
issue of allowing Retail Marijuana Stores to operate in the City has been discussed at numerous
public Council meetings and work sessions during the past year.
ALTERNATIVES:
If the Ordinance is not approved, Retail Marijuana Stores will not pay additional sales and use
taxes to the City.
RECOMMENDATION:
This Ordinance must be adopted in order to refer the ballot measure to the voters.
Attachments:
Proposed Ordinance