Ord 2523 - Marijuana TaxCOUNCIL BILL NO. 2970
ORDINANCE NO. 2523
AN ORDINANCE ESTABLISHING A TAX ON THE SALE OF MARIJUANA AND
MARIJUANA -INFUSED PRODUCTS IN THE CITY OF WOODBURN
WHEREAS, Section 4 of the City of Woodburn Charter provides:
Powers of the City. The City shall have all powers which the
constitutions, statutes, and common law of the United States and of this
state expressly or impliedly grant or allow municipalities, as fully as
though this charter specifically enumerated each of those powers; and
WHEREAS, the City Council stated at its meeting on September 22, 2014
that it desires to tax the sale or transfer of marijuana within the City; and
WHEREAS, the City is aware that Ballot Measure 91 is scheduled for the
November 4, 2014 general election and provides for a tax on engaging in the
business of producing marijuana; and
WHEREAS, Section 84 of Measure 91 provides that the measure takes
effect 30 days after approval by the voters, which is on December 4, 2014;
and
WHEREAS, this Ordinance is scheduled to be enacted and take effect
prior to December 4, 2014 and is intended to be read in pari materia with
Ballot Measure 91, should it pass, as the Ordinance excludes any tax on
engaging in the business of producing marijuana, which is the tax imposed
under Ballot Measure 91; NOW, THEREFORE,
THE CITY OF WOODBURN ORDAINS AS FOLLOWS:
Section 1. Purpose.
For the purposes of this Section, any Seller of Marijuana, medical Marijuana, or
Marijuana -infused products in the City is exercising a taxable privilege. The
purpose of this Section is to impose a Tax upon the Retail Sale of Marijuana,
medical Marijuana, and Marijuana -infused products and not on the business
of producing Marijuana.
Page- 1 - Council Bill No. 2970
Ordinance No. 2523
Section 2. Definitions.
When not clearly otherwise indicated by the context, the following words and
phrases, as used in this Ordinance have the following meanings:
A. "Director" means the City's Finance Director or his/her designee.
B. "Gross Taxable Sales" means the total amount received in money,
credits, property, or other consideration from Sales of Marijuana, medical
Marijuana, and Marijuana -infused products that are subject to the Tax
imposed by this Ordinance.
C. "Marijuana" means all parts of the plant of the Cannabis family
Moraceae, whether growing or not; the resin extracted from any part of the
plant; and every compound, manufacture, salt, derivative, mixture, or
preparation of the plant or its resin, as may be defined by Oregon Revised
Statutes as they currently exist or may from time to time be amended. It does
not include the mature stalks of the plant, fiber produced from the stalks, oil or
cake made from the seeds of the plant, any other compound, manufacture,
salt, derivative, mixture, or preparation of the mature stalks (except the resin
extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant
which is incapable of germination.
D. Oregon Medical Marijuana Program" means the office within the
Oregon Health Authority that administers the provisions of ORS 475.300 through
475.346, the Oregon Medical Marijuana Act, and all policies and procedures
pertaining thereto.
E. "Person" means natural person, joint venture, joint stock
company, partnership, association, club, company, corporation, business,
trust, organization, or any group or combination acting as a unit, including the
United States of America, the state, and any political subdivision thereof, or
the manager, lessee, agent, servant, officer, or employee of any of them.
F. Purchase or Sale" means the retail acquisition or furnishing for
consideration by any Person of Marijuana within the City and does not include
the acquisition or furnishing of Marijuana by a grower or processor to a Seller.
G. "Registry Identification Cardholder means a Person who has
been diagnosed by an attending physician with a debilitating medical
condition and for whom the use of medical Marijuana may mitigate the
symptoms or effects of the Person's debilitating medical condition, and who
has been issued a registry identification card by the Oregon Health Authority.
Page- 2 - Council Bill No. 2970
Ordinance No. 2523
H. "Retail Sale" means the transfer of goods or services in exchange
for any valuable consideration and does not include the transfer or exchange
of goods or services between a grower or processor and a Seller.
I. "Seller" means any Person who sells Marijuana or Marijuana -
infused products to purchasers for money, credit, property, or other
consideration within the City.
J. "Tax" means either the tax payable by the Seller or the aggregate
amount of taxes due from a Seller during the period for which the Seller is
required to report collections under this Ordinance.
K. "Taxpayer" means any Person obligated to account to the
Director for Taxes collected or to be collected, or from whom a Tax is due,
under the terms of this Ordinance.
Section 3. 1 ew of Tax.
A. Every Seller exercising the taxable privilege of selling Marijuana
and Marijuana -infused products, as defined in this Ordinance is subject to and
must pay a Tax for exercising that privilege.
B. The amount of Tax levied is as follows:
1. Five (5%) percent of the Gross Taxable Sale amount paid to the
Seller of Marijuana and Marijuana -infused products by a Person who is a
Registry Identification Cardholder.
2. Ten (10%) percent of the Gross Taxable Sale amount paid to
the Seller of Marijuana and Marijuana -infused products by Persons who
are purchasing Marijuana and Marijuana -infused products but are not
doing so under the provisions of the Oregon Medical Marijuana
Program.
Section 4. Deductions.
The following deductions are allowed against Sales received by the Seller
providing Marijuana:
A. Documented refunds of Sales actually returned to any purchaser.
Page- 3 - Council Bill No. 2970
Ordinance No. 2523
B. Documented adjustments in Sales that amount to a refund to a
purchaser, providing such adjustment pertains to the actual Sale of Marijuana
or Marijuana- infused products and does not include any adjustments for other
services furnished by a Seller.
.. . •--• I - -I In�
A. Every Seller must, on or before the last day of the month following
the end of each calendar quarter (in the months of April, July, October, and
January), make a return to the Director, on forms provided by the City,
specifying the total Sales subject to this Ordinance and the amount of Tax
collected under this Ordinance. The Seller may request, or the Director may
establish, shorter reporting periods for any Seller if the Seller or Director deems it
necessary in order to ensure collection of the Tax. The Director may require
further information in the return relevant to payment of the Tax. A return is not
considered filed until it is actually received by the Director.
B. At the time the return is filed, the Seller must remit to the City the
full amount of the Tax collected. Payments received by the City for
application against existing liabilities will be credited toward the period
designated by the Taxpayer under conditions that are not prejudicial to the
interest of the City. A condition considered prejudicial is the imminent
expiration of the statute of limitations for a period or periods.
C. The City will apply non -designated payments in the order of the
oldest liability first, with the payment credited first toward any accrued
penalty, then to interest, then to the underlying Tax, until the payment is
exhausted. Crediting of a payment toward a specific reporting period will be
first applied against any accrued penalty, then to interest, then to the
underlying Tax.
D. If the Director, in his or her sole discretion, determines that an
alternative order of payment application would be in the best interest of the
City in a particular tax or factual situation, the Director may order such a
change. The Director may establish shorter reporting periods for any Seller if
the Director deems it necessary in order to ensure collection of the Tax. The
Director also may require additional information in the return relevant to
payment of the liability. When a shorter return period is required, penalties
and interest will be computed according to the shorter return period. Returns
and payments are due immediately upon cessation of business for any
reason. Sellers must hold in trust all Taxes collected pursuant to this Ordinance
Page- 4 - Council Bill No. 2970
Ordinance No. 2523
for the City's account until the Seller makes payment to the City. A separate
trust bank account is not required in order to comply with this provision.
E. Every Seller required to remit the Tax imposed by this Ordinance is
entitled to retain five percent (5%) of all Taxes collected and due to the City to
defray the costs of bookkeeping and remittance.
F. Every Seller must keep and preserve, in an accounting format
established by the Director, records of all Sales made by the Seller and such
other books or accounts as the Director may require. Every Seller must keep
and preserve for a period of three years all such books, accounts, and other
records. The Director has the right to inspect all such records at all reasonable
times.
Section 6. Penalties and Interest.
A. Any Seller who fails to remit any portion of any Tax imposed by this
Ordinance within the time required must pay a penalty of ten percent (10%) of
the amount of the Tax, in addition to the amount of the Tax.
B. If any Seller fails to remit any delinquent remittance on or before a
period of 60 days following the date on which the remittance first became
delinquent, the Seller must pay a second delinquency penalty of ten percent
(10%) of the amount of the Tax, in addition to the amount of the Tax and the
penalty first imposed.
C. If the Director determines that the nonpayment of any remittance
due under this Ordinance is due to fraud, a penalty of twenty-five percent
(25%) of the amount of the Tax will be added thereto, in addition to the
penalties provided herein.
D. In addition to the penalties imposed, any Seller who fails to remit
any Tax imposed by this Ordinance must pay interest [at the rate of one
percent (1%) per month] or fraction thereof on the amount of the Tax,
exclusive of penalties, from the date on which the remittance first became
delinquent until paid.
E. Every penalty imposed, and any interest that accrues under the
provisions of this Ordinance becomes a part of the Tax required to be paid.
F. All sums collected pursuant to the penalty provisions in this
Ordinance will be distributed to the City's general fund.
Page- 5 - Council Bill No. 2970
Ordinance No. 2523
G. Penalties for certain late Tax payments may be waived or
reduced pursuant to policies and processes adopted by the Director.
However, the Director is not required to create a penalty waiver or reduction
policy. If the Director does not create a policy for waivers or reductions, no
waivers or reductions are allowed.
Section 7. Failure to Report and Remit Tax.
A. If any Seller fails to make any report of the Tax required by this
Ordinance within the time provided in herein, the Director will proceed to
obtain facts and information on which to base the estimate of Tax due. As
soon as the Director procures such facts and information upon which to base
the assessment of any Tax imposed by this Ordinance and payable by any
Seller, the Director will determine and assess against such Seller the Tax,
interest, and penalties provided.
B. If the Director makes a determination as outlined above, the
Director must give notice to the Seller of the amount assessed. The notice
must be personally served on the Seller or deposited in the United States mail,
postage prepaid, addressed to the Seller at the last known place of address.
C. The Seller may appeal the Director's determination as provided
herein. If no appeal is timely filed, the Director's determination is final and the
amount assessed is immediately due and payable.
Section 8. Appeal.
A. Any Seller aggrieved by any decision of the Director with respect
to the amount of Tax owed, along with interest and penalties, if any, may
appeal the decision to the City Administrator.
B. The Seller must file the appeal within 30 days of the City's serving
or mailing of the determination of Tax due. The Seller must file using forms
provided by the City.
C. Upon receipt of the appeal form, the City Administrator will
schedule a hearing to occur within 20 business days. The City Administrator will
give the Seller notice of the time and date for the hearing no less than seven
days before the hearing date. At the hearing, the City Administrator will hear
and consider any records and evidence presented bearing upon the
Director's determination of amounts due and make findings affirming,
reversing, or modifying the determination. The Director and the appellant
Page- 6 - Council Bill No. 2970
Ordinance No. 2523
may both provide written and oral testimony during the hearing. The findings
of the City Administrator are final and conclusive. The City will serve the
findings upon the appellant in the manner prescribed above for service of
notice of hearing. Any amount found to be due is immediately due and
payable upon the service of notice.
Section 9. Refunds.
A. The City may refund to the Seller any Tax, interest, or penalty
amount under any of the following circumstances:
1. The Seller has overpaid the correct amount of Tax, interest, or
penalty;
2. The Seller has paid more than once for the correct amount
owed; or
3. The City has erroneously collected or received any Tax, interest,
or penalties.
B. The City may not issue a refund unless the Seller provides to the
Director a written claim under penalty of perjury stating the specific grounds
upon which the claim is founded and on forms furnished by the City. The Seller
must file the claim within one year from the date of the alleged incorrect
payment to be eligible for a refund.
C. The Director has 20 calendar days from the date of the claim's
receipt to review the claim and make a written determination as to its validity.
After making the determination, the Director will notify the claimant in writing
of the determination by mailing notice to the claimant at the address
provided on the claim form.
D. If the Director determines the claim is valid, the claimant may
either claim a refund or take as a credit against Taxes collected and remitted
the amount that was overpaid, paid more than once, or erroneously received
or collected by the City. The claimant must notify the Director of the
claimant's choice no later than 15 days following the date the Director mailed
the determination, and the claimant must do so in a manner prescribed by
the Director.
E. If the claimant does not notify the Director of the claimant's
choice within the 15 -day period and the claimant is still in business, the City will
Page- 7 - Council Bill No. 2970
Ordinance No. 2523
grant a credit against the Tax liability for the next reporting period. If the
claimant is no longer in business, the City will mail a refund check to claimant
at the address provided in the claim form.
F. The City will not pay a refund unless the claimant establishes by
written records the right to a refund and the Director acknowledges the
claim's validity.
Section 10. Actions to Collect.
A. Any Tax required to be paid by any Seller under the provisions of
this Ordinance is a debt owed by the Seller to the City. Any Tax collected by a
Seller that has not been paid to the City is a debt owed by the Seller to the
City. Any Person owing money to the City under the provisions of this
Ordinance is liable to an action brought in the name of the City of Woodburn
for the recovery of the amount owing. In lieu of filing an action for recovery,
the City, when Taxes due are more than 30 days delinquent, may submit any
outstanding Tax due to a collection agency. So long as the City has complied
with the provisions set forth in ORS 697.105, if the City turns over a delinquent
Tax account to a collection agency, it may add to the amount owing an
amount equal to the collection agency fees, not to exceed the greater of
Fifty Dollars ($50) or fifty percent (50%) of the outstanding Tax, penalties, and
interest owing.
Section 11. Civil Infraction.
A. In addition to, and not in lieu of any other enforcement
mechanisms, a violation of any provision of this Ordinance constitutes a Class
1 Civil Infraction and may be processed according to the procedures
contained in the Woodburn Civil Infraction ordinance. It is a violation of this
Ordinance for any Seller or other Person to:
1. Fail or refuse to comply as required herein;
2. Fail or refuse to furnish any return required to be made;
3. Fail or refuse to permit inspection of records;
4. Fail or refuse to furnish a supplemental return or other data
required by the Director;
5. Render a false or fraudulent return or claim; or
Page- 8 - Council Bill No. 2970
Ordinance No. 2523
b. Fail, refuse, or neglect to remit the Tax to the City by the due
date.
B. The remedies provided herein are not exclusive and do not
prevent the City from exercising any other remedy available under the law.
C. The remedies provided herein do not prohibit or restrict the City or
other appropriate prosecutor from pursuing criminal charges under state law
or City ordinance.
Section 12. Confidentiality.
A. Except as otherwise required by law, it is unlawful for the City, any
officer, employee, or agent to divulge, release, or make known in any manner
any financial information submitted or disclosed to the City under the terms of
this Ordinance. Notwithstanding, the following is not prohibited:
1. The disclosure of the names and addresses of any Person who
is operating a licensed establishment from which Marijuana is sold or
provided;
2. The disclosure of general statistics in a form which would not
reveal an individual Seller's financial information;
3. Presentation of evidence to the court, or other tribunal having
jurisdiction, in the prosecution of any criminal or civil claim by the City or
an appeal from the City for amounts due;
4. The disclosure of information when such disclosure of
conditionally exempt information is ordered under public records law
procedures; or
5. The disclosure of records related to a business' failure to report
and remit the Tax when the report or Tax is in arrears for over six months
or when the Tax exceeds $5,000. The City Council expressly finds that
the public interest in disclosure of such records clearly outweighs the
interest in confidentiality under ORS 192.501(5).
.rW-7M
A. The City may examine or may cause to be examined by an agent
or representative designated by the City for that purpose, any books, papers,
Page- 9 - Council Bill No. 2970
Ordinance No. 2523
records, or memoranda, including copies of Seller's state and federal income
Tax return, bearing upon the matter of the Seller's Tax return for the purpose of
determining the correctness of any Tax return, or for the purpose of an
estimate of Taxes due. All books, invoices, accounts, and other records must
be made available within the City limits and be open at any time during
regular business hours for examination by the Director or an authorized agent
of the Director. If any Taxpayer refuses to voluntarily furnish any of the
foregoing information when requested, the Director may immediately seek a
subpoena from the municipal court to require that the Taxpayer or a
representative of the Taxpayer attend a hearing or produce any such books,
accounts, and records for examination.
A. The Director is authorized to prescribe forms and promulgate rules
and regulations to aid in the making of returns, the ascertainment, assessment,
and collection of the Marijuana Tax, and to provide for:
1. A form of report on Sales and Purchases to be supplied to all
vendors;
2. The records that Sellers providing Marijuana and Marijuana -
infused products must keep concerning the Tax imposed.
Section 15. Severability. The sections, subsections, paragraphs, and
clauses of this Ordinance are severable. The invalidity of one section,
subsection, paragraph, or clause does not affect the validity of the remaining
sections, subsections, paragraphs, and clauses.
Section 16. Savings. Nothing in this Ordinance affects the validity of
prosecutions related to marijuana use and possession under state or federal
laws, or Woodburn Ordinances currently in effect.
Approved as to form: �• ' "y i���
City Attorney /
Passed by the Council
Page- 10 - Council Bill No. 2970
Ordinance No. 2523
Submitted to the Mayor
Approved by the Mayor
Filed in the Office of the Recorder
ATTEST: �4t ,�, r�l 2.15%
Heather Pierson, City Recorder
City of Woodburn, Oregon
Page- 11 - Council Bill No. 2970
Ordinance No. 2523
ocstvvxs i�T t `}
DCJMh.p r l 3rd 01
oc�ee� ly..t 7_ o ty
