The Morning Report
Get the news and information you need to take on the day.
As you might have seen in my recent post trying to figure out how the mayor would put a special tax on marijuana without a vote of the people, the mayor’s office wouldn’t answer questions about it.
So I took the opportunity Monday to send KPBS the question via Twitter. The station was hosting its monthly Q-and-A with the mayor on “Midday Edition.”
And he answered! Sort of. Here was the exchange:
MAUREEN CAVANAUGH: We asked people to tweet their questions for you and to go on Facebook. We did get in a tweeted question from Voice of San Diego’s Scott Lewis. He wants to know — when it comes to your plan about new guidelines for medical marijuana facilities — he wants to know more specifically about how you plan to tax medical marijuana.
BOB FILNER: Well, Scott has found a very clever way to get a question to me by going through KPBS. But we are proposing and the City Council has not yet acted on it and we put it in as a general concept. It would have to go through the city attorneys. What we call an excise tax of 2 percent on the sales of medical marijuana to make sure that the increased enforcement and registration requirements we want to protect the public in doing that that we get the money to do that. There is a provision in the Constitution for an excise tax. It’s got to be collected through the city, the way we collect any sales tax, for example, or any tax on tourists. So the mechanism is in place and we have reporting requirements from any dispensaries that are set up by law. And have that 2 percent going to the enforcement actions that we need to do to keep our kids safe while we are providing humane and compassionate treatment for those who need medical marijuana.
MAUREEN CAVANAUGH: Just a technical question on that. There is a technicality about an excise tax being a product where medical marijuana is not technically a product. A sales tax, however, would have to be approved by a vote of the people, would you take that if it becomes a sales tax to that?
BOB FILNER: If it’s necessary. Again I think there’s definitions of an excise tax to provide the monies that are needed to regulate the product that is involved. So I think we fall under that exemption. But, you know, the lawyers will check on it before it is ever put into law.
MAUREEN CAVANAUGH: When do you plan to submit those guidelines to the city Council?
BOB FILNER: I submitted them. They were supposed to go on calendar this month but I think the City Council may postpone that another month just because of their own calendar. So it will be coming out in the next weeks or so.
Remember, there are three awkward facts about all this.
1) Marijuana sales aren’t really sales. You can join a collective and donate. But it’s not a sale, it’s a donation. Now, the state has gotten past this and basically admitted that these are sales of a product and can therefore be taxed.
2) Sales taxes are not excise taxes. Excise taxes are charged on materials before they are put on shelves to be sold. Sales taxes are based on the actual sales price a consumer ends up paying for them. An “excise tax on sales” just doesn’t make sense.
3) Sales taxes have to be voted on by the people. Oakland voters, for instance, approved a 5 percent sales tax on cannabis in 2010.
So I’m not sure what Filner means here: “There is a provision in the Constitution for an excise tax. It’s got to be collected through the city, the way we collect any sales tax for example or any tax on tourists.”
First, the city doesn’t actually collect the sales tax, though it does collect the tourist tax.
Second, what he appears to be talking about is a so-called Deemed Approved ordinance, which allows municipalities to charge certain retailers to help them pay for nuisance-related costs that come from things like alcohol.
But that’s usually a flat fee on retailers, like the $5,000 Santa Rosa charges those establishments.
And that’s likely the vehicle Filner and the city would use to implement his own proposed $5,000 fee on new marijuana collectives in the city.
But it’s unclear how that could be tailored for an actual tax on the sales of the drug, at least without a vote of the people.
Which gets back to the question: Is the mayor proposing a referendum?
Back to his KPBS interview:
“If it’s necessary. Again I think there’s definitions of an excise tax to provide the monies that are needed to regulate the product that is involved. So I think we fall under that exemption,” Filner said.
Anyone know what he’s talking about?
I’m Scott Lewis, the CEO of Voice of San Diego. Please contact me if you’d like at email@example.com or 619.325.0527 and follow me on Twitter (it’s a blast!):
Like VOSD on Facebook.
Voice of San Diego is a nonprofit that depends on you, our readers. Please donate to keep the service strong. Click here to find out more about our supporters and how we operate independently.