Humboldt County is expecting to collect more than $373,000 in tax funds from its new medical marijuana cultivation tax, Measure S, according to county Treasurer-Tax Collector John Bartholomew.
“We’ll be sending another set in October for all the newly approved permits since this first set of bills,” Bartholomew wrote in an email to the Times-Standard on Tuesday.
Bartholomew said the first round of tax payments are due Saturday and the county will start applying penalties to delinquent cultivators starting on May 1.
“So if payment is not received prior to the end of April, then penalties are attached,” he wrote.
County Administrative Officer Amy Nilsen stated at a community budget meeting earlier this month that the county anticipates $2.2 million in cannabis tax revenues in the upcoming 2017-2018 fiscal year. This amount is expected to increase as more commercial cannabis cultivation permits are approved by the Planning and Building Department.
The county is currently collecting community input on how it would like to see these tax funds spent.
More than 2,300 applications for marijuana business permits were submitted to the county by last year’s Dec. 30 deadline of which the majority are for cultivation, according to the county Planning and Building Department. Only about 100 of these applications are actually ready to be processed, however, and only 18 permits have been approved so far, according to the county.
Federal banking restrictions on marijuana businesses have made tax collection a tricky issue for both county and state regulators.
The county currently uses an invoice system to collect taxes from local cultivators. Bartholomew has stated to the Times-Standard this system does not have any enforcement teeth should the cultivator decide to abandon their property after harvesting their crop.
For Bartholomew, the best way to address this would be to place the cultivation tax on the county property tax roll, which would allow the county to auction off the property of delinquent cultivators. However, this would require the state’s tax laws to be amended and the Legislature is not set to take up that issue this year.