To impose an excise tax on businesses engaged in the cannabis industry operating within the City of Santa Rosa pursuant to the State Medical Cannabis Regulation and Safety Act (specifically California Business and Professions Code Section 19320), the "California Control, Regulate and Tax Adult Use of Marijuana Initiative" approved by the State's voters on November 8, 2016, and/or any other enabling legislation, or in violation of such legislation, and notwithstanding whether such State laws use the term "marijuana" or "cannabis"; and

To specify the type of tax and maximum rate of tax that may be levied and the method of collection; and

To comply with all requirements to impose a general excise tax, such tax to become operative only if and to the extent implemented by the City Council by resolution.

Tax on Commercial Cannabis Cultivation.

Tax on Cannabis Manufacturers, Distributors, and Dispensaries.

No further voter approval shall be required for the adoption or increase of a tax under the authority granted by this Section 6.10.050 of this chapter, it being the intent of the People of the City of Santa Rosa to authorize such a tax up to and including the maximum rates set forth above whenever implemented by the City Council hereafter.

All persons engaging in a cannabis business, whether an existing, newly-established or acquired business, shall register with the Collector within 30 days of commencing operation or by July 31, 2017, whichever is later, and shall annually renew such registration by January 1 of each year thereafter. In registering, such persons shall furnish to the Collector a sworn statement, upon a form provided by the Collector, setting forth the following information:

Any financial information required under subsection A will be used only to calculate and enforce the tax imposed under this chapter, will be exempt from disclosure under the Public Records Act pursuant to Government Code Section 6254(i), and will not be used by the City for criminal enforcement except as provided in Sections 6-10.270 and 6-10.280 of this chapter.

An annual registration fee of $100.00 shall be presented with the sworn statement submitted under this section. This fee shall not be considered a tax and may be adjusted by resolution of the City Council.

Unless otherwise specifically provided by the Collector in writing, the annual fee under this section shall be due and payable in advance, on the first day of January, and shall be considered delinquent if unpaid after the last day of February. The date on which the fee becomes delinquent may be extended in writing by the Collector, upon good cause shown, to a date not later than March 31st.

For failure to pay the fee under this section when due, a penalty of 15 percent shall be added to the fee.

For failure to pay the fee under this section when due, interest on the delinquent fee (exclusive of penalty) at the rate of 0.84 percent per month shall be added to the fee for each month or portion of a month that fee, penalty and/or interest is not paid.

For each cannabis business subject to tax under this chapter, a separate registration and fee payment shall be required under this section for each branch or location of the business and for each separate type of cannabis business at each branch or location.

Upon receipt of the registration and fee required under this section, the Collector shall issue to the cannabis business a Certificate of Registration. Such Certificate of Registration shall be non-transferrable except as otherwise provided by the Collector in writing.

Each person subject to tax under this chapter, except a cannabis cultivation tax based on a square footage, shall, on or before the last day of the month following the close of each calendar quarter, prepare and submit a tax return and remit to the Collector the tax due for that quarter. At the time the return is filed, the full amount of the tax due for the prior quarter shall be remitted to the Collector. At any time, a business may apply in writing to the Collector to have these tax returns and payments made less frequently or on a different schedule. Any determination resulting from this application will be at the sole discretion of the Collector and shall be provided in writing.

Each person subject to a cannabis cultivation tax based on a square footage shall, on or before the last day of the month following the close of each calendar quarter, prepare and submit a tax return and remit to the Collector the tax due for that quarter. The tax shall be calculated in accordance with rules and regulations established by the Collector pursuant to Section 6-10.160. The tax return may include a request for adjustment of the tax due to crop loss or periods without cultivation, along with evidence substantiating the crop loss or fallow periods. If the cultivation begins significantly after January 1 or terminates significantly before December 31 of the calendar year, a request to prorate the tax may be submitted with evidence supporting the timing of the cultivation. The decision to prorate or adjust the tax will be made at the sole discretion of the Collector. At the time the return is filed, the full amount of the tax due for the prior quarter shall be remitted to the Collector. At any time, a business may apply in writing to the Collector to have these tax returns and payments made less frequently or on a different schedule. Any determination resulting from this application will be at the sole discretion of the Collector and shall be provided in writing.

All tax returns shall be completed on forms prescribed by the Collector.

Tax returns and payments for all outstanding taxes owed the City under this chapter are immediately due and payable to the City of Santa Rosa upon cessation of business for any reason.

The person provides evidence satisfactory to the Collector that failure to pay timely was due to circumstances beyond the control of the person and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, and the person paid the delinquent cannabis industry tax and accrued interest owed the City before applying to the Collector for a waiver.

The waiver provisions specified in this section shall be granted only once during any 24-month period.

Nothing in this chapter shall be deemed or construed to apply to any person transacting and carrying on any business that is exempt from the payment of such taxes as are herein prescribed by virtue of the Constitution or applicable statutes of the United States or of the State.

Any person claiming an exemption pursuant to this section shall file a sworn statement with the Collector stating the facts upon which exemption is claimed. Unless and until the Collector determines in writing that such person is exempt from tax under this chapter, such person shall be liable for the payment of the tax imposed by this chapter.

This chapter shall not be deemed or construed to require the payment of any general business tax under Chapter 6-04 of the Santa Rosa City Code for any cannabis business that is subject to payment of a cannabis industry tax under this chapter.

This tax is intended to be applied in a manner consistent with the United States and California Constitutions, State and local law. None of the tax provided for by this chapter shall be applied in a manner that causes an undue burden upon interstate commerce, a violation of the equal protection or due process clauses of the Constitutions of the United States or the State of California or a violation of any other provision of the California Constitution, State or local law.

This chapter shall be construed and implemented consistent with the provisions of Chapter 6-04 of this Code except as this chapter or other law otherwise requires or the Collector otherwise determines in writing as authorized under this Code.

The Collector shall have the power to audit and examine all books and records of any person engaged in cannabis business in the City, including both State and Federal income tax returns, California sales tax returns, or other evidence documenting the gross receipts of persons engaged in cannabis business, and, where necessary, all equipment of any person engaged in cannabis business in the City, for the purpose of ascertaining the amount of cannabis industry tax, if any, required to be paid under this chapter, and for the purpose of verifying any statements or any item thereof when filed by any person pursuant to this chapter. If such person, after written demand by the Collector, refuses to make available for audit, examination or verification such books, records or equipment as the Collector requests, the Collector may, after full consideration of all information within his or her knowledge concerning the cannabis business and activities of the person so refusing, make an assessment against the cannabis business of the taxes estimated to be due under this chapter, following the procedures set forth in Section 3-28.120 of the Santa Rosa City Code.

It shall be the duty of every person liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of at least three years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Collector shall have the right to inspect at all reasonable times.

If any person, while liable for any amount under this chapter, sells, assigns or otherwise transfers the cannabis business, whether voluntarily or involuntarily, the person's successor, assignee or other transferee, or other person or entity obtaining ownership or control of the business ("transferee"), shall satisfy any tax liability owed to the City associated with the business when due hereunder. Failure to do so for the benefit of the City will result in being personally liable to the City for the full amount of the unpaid tax liability, interest and penalties. The transferee shall notify the Collector of the date of transfer at least 30 days before the transfer date; or if the agreement to sell, transfer, or otherwise dispose of the business was made less than 30 days before the date of transfer, notice shall be provided immediately upon the existence of the agreement.

The transferee shall be deemed to have complied with the requirement of this section to satisfy the unpaid tax liability if the transferee complies with the requirements of California Revenue and Taxation Code Section 7283.5 by withholding from the purchase price, for the benefit of the City, an amount sufficient to cover the tax liability, or by otherwise paying the tax liability and obtaining from the Collector a "Tax Clearance Certificate" showing that all outstanding tax liability has been paid and stating that no amount is due through the date of transfer.

The Collector, within 90 days of receiving a written request from a transferee, may issue a "Tax Clearance Certificate" stating either the amount of tax liability due and owing for the business, or stating that there is no tax liability due and owing for the business through a stated date. The Collector may also request financial records from the current or former owner or operator to audit the tax that may be due and owing. The Collector shall issue a Tax Clearance Certificate within 30 days of completing the audit, stating the amount of the tax liability owed, if any, unless the Collector determines that the records provided in connection with the audit are insufficient to determine whether taxes are due and owed or in what amount. If the Collector determines that the records are insufficient, the Collector may rely on the facts and information available to estimate any tax liability. The Collector may issue a Tax Clearance Certificate stating the amount of the tax liability, if any, based on such facts and information available. Unless an appeal is filed in accordance with Section 6-10.260, the Tax Clearance Certificate shall serve as conclusive evidence of the tax liability associated with the property through the date stated on the certificate.

The payment of a tax required by this chapter, and its acceptance by the City, shall not entitle any person to engage in any cannabis business unless the person has complied with all of the requirements of this Code and all other applicable State or local laws.

No tax paid under this chapter shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any State or local laws.

Under any of the following circumstances and at any time, the Collector may make and give notice of an assessment of the amount of tax owed by a person under this chapter:

The notice of assessment shall separately set forth the amount of any tax, fee, interest and/or penalties known by the Collector to be due or estimated by the Collector, after consideration of all information within the Collector's knowledge concerning the business and activities of the person assessed, to be due under each applicable section of this chapter.