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Ordinance No. 16-15 CITY OF TIGARD, OREGON TIGARD CITY COUNCIL ORDINANCE NO. 16-/5- AN sAN ORDINANCE ESTABLISHING A TAX ON THE SALE OF MARIJUANA 1'1'hMS BY A MARIJUANA RETAILER IN THE CITY OF TIGARD WHEREAS,Section 34a of House Bill 3400 (2015) (codified at ORS 475B.345) provides that a city council may adopt an ordinance to be referred to the voters that imposes a tax on the sale of marijuana items by a marijuana retailer in the area subject to the jurisdiction of the city;and WHEREAS, the Tigard City Council wishes to exercise that power to tax the sale of marijuana items by a marijuana retailer in the City of Tigard at the maximum rate allowed by law,which is currently three percent. NOW,THEREFORE,THE CITY OF TIGARD ORDAINS AS FOLLOWS: SECTION 1: Tigard Municipal Code is amended by adding a new Chapter 3.80,Marijuana Tax, to read as attached in Exhibit A. SECTION 2: Severability. The sections, subsections,paragraphs and clauses of this ordinance or any intergovernmental agreement with any department or agency of the State of Oregon are severable.The invalidity of one section, subsection,paragraph,or clause shall not affect the validity of the remaining sections, subsections, paragraphs and clauses. SECTION 3: Savings. Notwithstanding any amendment/repeal,the City ordinances in existence at the time any criminal or civil enforcement actions were commenced, shall remain valid and in full force and effect for purposes of all cases filed or commenced during the times said ordinance(s) or portions thereof were operative. This section simply clarifies the existing situation that nothing in this Ordinance affects the validity of prosecutions commenced and continued under the laws in effect at the time the matters were originally filed. SECTION 4: Intergovernmental Cooperation. After the effective date of this ordinance,the City may enter into an agreement whereby the State of Oregon is responsible for the administration,collection,distribution or enforcement of the tax authorized under this chapter,either in full or in part,without needing to obtain voter approval. SECTION 5: Tigard Municipal Code Chapter 3.70 is hereby repealed, as of the effective date of this ordinance. SECTION 6: This ordinance shall be referred to the electors of Tigard at the next statewide general election on Tuesday,November 8,2016. SECTION 7: This ordinance shall be effective upon certification by the County Elections official that it has received voter approval at an election conducted on November 8,2016. Ordinance No. 16- /.5- Page 5Page 1 PASSED: By t/PW/1/171#6'S vote of all Council members present after being read by number and title only this 26' day of ,�t , 2016. ‘ 4.6)-64&d ,„ Carol Krager, City Recorder APPROVED: Approved by Tigard City Council this ,76.14-day of �LJJG ,2016. Wt, (ohn L. Cook,Mayor v Approved as to fo.•. City Att. _ey Page 2 - Ordinance No. 16-IT marijuana retailer by or on behalf of a Chapter 3.80 MARIJUANA TAX consumer of the marijuana item. Sections: D. "Marijuana item"has the meaning given that term in ORS 475B.015(16). 3.80.010 Purpose 3.80.015 Definitions E. Person" means natural person, 3.80.020 Tax Imposed joint venture,joint stock company, 3.80.025 Amount and Payment, partnership, association,club,company, Deductions corporation,business,trust,organization,or any 3.80.030 Marijuana Retailer group or combination acting as a unit,including Responsible for Payment the United States of America,the State of of Tax Oregon and any political subdivision thereof,or 3.80.035 Penalties and Interest the manager,lessee,agent, servant,officer or 3.80.040 Appeal employee of any of them. 3.80.045 Refunds 3.80.050 Actions to Collect F. Retail sale" or"Sale" means the 3.80.055 Violation exchange,gift or barter of a marijuana item by 3.80.060 Confidentiality any person to a consumer. 3.80.065 Audit of Books,Records, or Persons G. "Marijuana retailer"means any 3.80.070 Forms and Regulations person who is required to be licensed or 3.80.075 Intergovernmental registered or has been licensed or registered Agreement by the State of Oregon to provide marijuana items to consumers for money, credit,property 3.80.010 Purpose or other consideration. The purpose of this chapter is to impose H. "Tax" means either the tax payable a tax upon the retail sale of marijuana items by the marijuana retailer or the aggregate by marijuana retailers in the City of Tigard. amount of taxes due from a marijuana retailer during the period for which the marijuana 3.80.015 Definitions retailer is required to report collections under this chapter. As used in this ordinance,unless the I. "Taxpayer"means any person context requires otherwise: obligated to account to the Director for taxes collected or to be collected,or from whom a A. "Consumer"means a person who tax is due,under the terms of this chapter. purchases,acquires,owns,holds or uses marijuana items other than for the purposes p 3.80.020 Tax Imposed of resale. B. "Director"means the Director of A tax is hereby levied and shall be paid by Finance for the City of Tigard or his or her every marijuana retailer exercising the taxable designee. privilege of selling marijuana items as defined in this chapter. The Director is authorized to C. "Retail sale price"means the price paid exercise all supervisory and administrative for a marijuana item,excluding tax,to a powers with regard to the enforcement, collection,and administration of the tax. Exhibit A—Page 1 3.80.025 Amount and Payment, Deductions C. At the time the return is filed,the full amount of the tax collected shall be remitted to In addition to any fees or taxes otherwise the City. provided for by law,every marijuana retailer engaged in the sale of marijuana items in the D. Payments shall be applied in the order of City of Tigard shall pay a tax of three percent the oldest liability first,with the payment credited (3%) of the retail sale price paid to the first toward any accrued penalty,then to marijuana retailer of marijuana items,or the interest,then to the underlying tax until the maximum allowed by state law,whichever is payment is exhausted. Crediting of a payment greater. The tax shall be collected at the point toward a specific reporting period will be first of sale of a marijuana item by a marijuana applied against any accrued penalty,then to retailer at the time at which the retail sale interest,then to the underlying tax.If the occurs and remitted by each marijuana retailer Director,in his or her sole discretion,determines that engages in the retail sale of marijuana that an alternative order of payment application items. would be in the best interest of the City in a particular tax or factual situation, the Director 3.80.030 Marijuana Retailer Responsible may order such a change. The Director may for Payment of Tax establish shorter reporting periods for any marijuana retailer if the Director deems it A. Every marijuana retailer shall obtain a necessary in order to ensure collection of the business license from the City of Tigard tax.The Director also may require additional pursuant to TMC 5.04. The marijuana information in the return relevant to payment retailer will indicate on the business license of the liability. When a shorter return period is application whether the marijuana retailer is required,penalties and interest shall be licensed by or registered with the State of computed according to the shorter return Oregon to provide marijuana items to period. Returns and payments are due consumers for money, credit,property or immediately upon cessation of business for any other consideration. reason.All taxes collected by marijuana retailers pursuant to this chapter shall be held in trust B. Every marijuana retailer shall,on or for the account of the City until payment is before the last day of the month following the made to the City.A separate trust bank account end of each calendar quarter(in the months of is not required in order to comply with this April,July,October and January)make a return to provision. the Director,on forms provided by the City, specifying the total sales subject to this chapter E. Every marijuana retailer must keep and and the amount of tax collected under this preserve,in an accounting format established by chapter.The marijuana retailer may request,or the Director,records of all sales made by the the City may establish, shorter reporting periods marijuana retailer and such other books or for any marijuana retailer if the marijuana accounts as may be required by the Director for retailer or City deems it necessary in order to a period of three (3)years or until all taxes ensure collection of the tax and the City may associated with the sales have been paid, require further information in the return whichever is longer. The City shall have the relevant to payment of the tax.A return shall right to inspect all such records at all not be considered filed until it is actually reasonable times. received by the Director. Exhibit A—Page 2 3.80.035 Penalties and Interest modifying the determination. The findings of the hearings officer shall be final and A. Any marijuana retailer who fails to conclusive,and shall be served upon the remit any portion of any tax imposed by this appellant in the manner prescribed in Chapter chapter within the time required shall pay a 1.17. Any amount found to be due shall be penalty of ten percent (10%) of the amount immediately due and payable upon the service of the tax,in addition to the amount of the tax. of notice. B. If the City determines that the 3.80.045 Refunds nonpayment of any remittance due under this chapter is due to fraud,a penalty of twenty-five A. Whenever the amount of any tax, percent(25%) of the amount of the tax shall be interest or penalty has been overpaid or paid added thereto in addition to the penalties stated more than once,or has been erroneously in subparagraphs 1 and 3 of this section. collected or received by the City under this chapter,it may be refunded as provided in C. In addition to the penalties imposed,any subparagraph 2 of this section,provided a marijuana retailer who fails to remit any tax claim in writing, stating under penalty of imposed by this chapter shall pay interest at the perjury the specific grounds upon which the rate of one percent (1%)per month or fraction claim is founded,is filed with the Director thereof on the amount of the tax,exclusive of within one (1) year of the date of payment. penalties,from the date on which the remittance The claim shall be on forms furnished by the first became delinquent until paid. City. D. Penalties imposed,and such interest as B. The Director shall have twenty(20) accrues for violation of this chapter are separate calendar days from the date of receipt of a claim from,and in addition to,the tax imposed on the to review the claim and make a determination sale of marijuana items. in writing as to the validity of the claim.The Director shall notify the claimant in writing of E. All sums collected pursuant to the the Director's determination. Such notice shall penalty provisions in this section shall be be mailed to the address provided by claimant distributed to the City of Tigard General Fund on the claim form. In the event a claim is to offset the costs of auditing and enforcement determined by the Director to be a valid claim, of this tax. in a manner prescribed by the Director a 3.80.040 Appeal marijuana retailer may claim a refund, or take as credit against taxes collected and remitted, Any marijuana retailer aggrieved by any the amount overpaid,paid more than once or decision of the Director with respect to the erroneously collected or received. The amount of such tax,interest and penalties,if marijuana retailer shall notify Director of any,may appeal pursuant to the Appeals to claimant's choice no later than fifteen (15) Civil Infractions Hearings Officer in Chapter days following the date Director mailed the 1.17 of this code, except that the appeal shall determination. In the event claimant has not be filed within thirty (30) days of the serving or notified the Director of claimant's choke within mailing of the determination of tax due.The the fifteen (15) day period and the marijuana retailer is still in business, a credit will be hearings officer shall hear and consider any records and evidence presented bearing upon granted against the tax liability for the next the Director's determination of amount due, reporting period. If the marijuana retailer is no longer in business,a refund check will be mailed and make findings affirming,reversing or to claimant at the address provided in the claim Exhibit A—Page 3 form. other person to: 1. Fail or refuse to comply as required herein; C. No refund shall be paid under the provisions of this section unless the 2. Fail or refuse to furnish claimant established the right by written any return required to be records showing entitlement to such made; refund and the Director acknowledged the validity of the claim. 3. Fail or refuse to permit inspection of records; 3.80.050 Actions to Collect 4. Fail or refuse to furnish a Any tax required to be paid by any supplemental return or other marijuana retailer under the provisions of data required by the City; this chapter shall be deemed a debt owed by the marijuana retailer to the City.Any such 5. Render a false or tax collected by a marijuana retailer which fraudulent return or claim; or has not been paid to the City shall be 6. Fail, refuse or neglect to deemed a debt owed by the marijuana remit the tax to the city by the retailer to the City. Any person owing due date. money to the City under the provisions of this chapter shall be liable to an action B. Filing a false or fraudulent brought in the name of the City of Tigard return shall be considered a Class B for the recovery of such amount. In lieu of misdemeanor, subject to Chapter filing an action for the recovery,the City of 7.28.020 of this code, Unsworn Tigard,when taxes due are more than 30 Falsification. The remedies provided (thirty) days delinquent,can submit any by this section are not exclusive and outstanding tax to a collection agency. So shall not prevent the City from long as the City of Tigard has complied exercising any other remedy available with the provisions set forth in ORS under the law,nor shall the provisions 697.105,in the event the City turns over a of this ordinance prohibit or restrict delinquent tax account to a collection the City or other appropriate agency,it may add to the amount owing an prosecutor from pursuing criminal amount equal to the collection agency fees, charges under state law or City not to exceed the greater of fifty dollars ordinance. ($50.00) or fifty percent (50%) of the outstanding tax,penalties and interest owing. 3.80.060 Confidentiality 3.80.055 Violation Except as otherwise required by law, A. Violation of this chapter shall it shall be unlawful for the City,any constitute a Class 1 civil infraction which officer,employee or agent to divulge, shall be processed according to the release or make known in any manner procedures established in Chapter 1.16 of any financial information submitted or this code, Civil Infractions. It is a violation disclosed to the City under the terms of of this chapter for any marijuana retailer or this chapter. Nothing in this section shall Exhibit A—Page 4 prohibit: that purpose, any books, papers, records, or memoranda,including copies of A. The disclosure of the names and marijuana retailer's state and federal income addresses of any person who is operating a tax return,bearing upon the matter of the licensed establishment from which marijuana retailer's tax return. All books, marijuana items are sold or provided;or invoices, accounts and other records shall be made available within the City limits B. The disclosure of general statistics in and be open at any time during regular a form which would not reveal an business hours for examination by the individual marijuana retailer's financial Director or an authorized agent of the information; or Director. C. The disclosure of information to any B. If the examinations or state agency related to the licensing or investigations disclose that any reports of registration of the marijuana retailer or when marijuana retailers filed with the Director required to carry out any part of this chapter. pursuant to the requirements herein have shown incorrectly the amount of tax D. Presentation of evidence to the accruing, the Director may make such court, or other tribunal having jurisdiction changes in subsequent reports and in the prosecution of any criminal or civil payments, or make such refunds, as may claim by the City or an appeal from the City be necessary to correct the errors for amount due the City under this chapter; disclosed by its examinations or or investigations. E. The disclosure of information when C. The marijuana retailer shall such disclosure of conditionally exempt reimburse the City for reasonable costs of information is ordered under public records the examination or investigation if the law procedures;or action disclosed that the marijuana F. The disclosure of records related to retailer paid 95 percent or less of the tax owing for the period of the examination a business' failure to report and remit the or investigation. In the event that such tax when the report or tax is in arrears for examination or investigation results in an over six(6) months or the tax exceeds five assessment by and an additional payment thousand dollars ($5,000). The City Council due to the City, such additional payment expressly finds and determines that the shall be subject to interest at the rate of 1 public interest in disclosure of such records percent per month, or the portion clearly outweighs the interest in thereof, from the date the original tax confidentiality under ORS 192.501(5). payment was due. 3.80.065 Audit of Books,Records, D. If any taxpayer refuses to or Persons voluntarily furnish any of the foregoing A. The City, for the purpose of information when requested,the City may determining the correctness of any tax immediately seek a subpoena from the return, or for the purpose of an estimate Tigard Municipal Court to require that the of taxes due, may examine or may cause taxpayer or a representative of the to be examined by an agent or taxpayer attend a hearing or produce any representative designated by the City for such books, accounts and records for examination. Exhibit A—Page 5 E Every marijuana retailer shall keep a record in such form as may be prescribed by the City of all sales of marijuana items. The records shall at all times during the business hours of the day be subject to inspection by the City or authorized officers or agents of the Director. F. Every marijuana retailer shall maintain and keep, for a period of three (3) years, or until all taxes associated with the sales have been paid,whichever is longer, all records of marijuana items. 3.80.070 Forms and Regulations The Director is hereby authorized to prescribe forms and promulgate rules and regulations to aid in the making of returns, the ascertainment,assessment and collection of said marijuana tax and in particular and without limiting the general language of this chapter,to provide for: A. A form of report on sales and purchases to be supplied to all vendors; and B. The records which marijuana retailers are to keep concerning the tax imposed by this chapter. 3.80.075 Intergovernmental Agreement The City Council may enter into an IGA with any department or agency of the State of Oregon whereby the State is responsible for the administration, collection, distribution, or enforcement of the tax authorized under this chapter, either in full or in part The terms of that agreement shall apply in lieu of and shall supersede conflicting provisions of this chapter but shall not be construed as repealing any provision of this chapter. Exhibit A—Page 6