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SB-148 State Board of Equalization: counties: cannabis-related business: cash payments.(2017-2018)



Current Version: 04/05/17 - Amended Senate

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SB148:v97#DOCUMENT

Amended  IN  Senate  April 05, 2017
Amended  IN  Senate  March 23, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill
No. 148

Introduced by Senators Wiener and Atkins

January 17, 2017

An act to add Section 15630 to the Government Code, and to amend Sections 6479.3 and 34015 of, to add Sections 7204.5 and 7270.10 to, to add Part 13.5 (commencing with Section 31001) to Division 2 of, and to repeal the heading of Part 13.5 (commencing with Section 31020) of Division 2 of, the Revenue and Taxation Code, relating to cannabis, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 148, as amended, Wiener. State Board of Equalization: counties: state agencies: collection of cash payments: cannabis-related businesses. cannabis-related business: cash payments.

Existing

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, exempts from specified criminal penalties the possession or cultivation of medical marijuana by patients and primary caregivers. The Control, Regulate and Tax Adult Use of Marijuana Act of 2016, 2016 (AUMA) an initiative measure enacted by the approval of Proposition 64 at the November 8, 2016, statewide general election, provides for the licensure and regulation of commercial adult marijuana activities by various state agencies. The Medical Cannabis Regulation and Safety Act (MCRSA) provides for the licensure and regulation of commercial medical cannabis activity by various state entities.
This bill would enact the Cannabis State Payment Collection Law and would authorize the State Board of Equalization or a county to collect cash payments from cannabis-related businesses for a state agency that administers any fee, fine, penalty, tax, or other charge fees, fines, penalties, taxes, or other charges payable by a cannabis-related business, if that state agency has entered into an agreement with the board or county. This bill would require a county to collect only if both the board of supervisors of the county and the county tax collector or county treasurer-tax collector approves of entering into an agreement with a state agency to make those collections. The bill would similarly authorize the board to enter into an agreement with a county to collect cash payments from cannabis-related businesses for any fee, fine, penalty, tax, or other charge fees, fines, penalties, taxes, or other charges that is are payable to the county. The bill would require the agreement to include specified provisions, including that the board or county transmit the collected moneys to the Treasurer to be deposited in the State Treasury to the credit of the funds or accounts in which the fees, fines, penalties, taxes, or other charges are otherwise required by law to be deposited, as specified.
For the collection by the board or a county of regulatory fees on the behalf of a state agency, or by the board of regulatory fees on behalf of a county, pursuant to an agreement, this bill would continuously appropriate to the board or county an amount equal to the amount necessary for its costs of collection, not to exceed 10% of the amounts collected, from the funds or accounts in which those regulatory fees are to be deposited. For the collection by the board or a county of fines, penalties, taxes, or other charges on behalf of a state agency, or by the board on behalf of a county, pursuant to an agreement, the bill would require the board or county to be reimbursed for its costs of collection from the funds or accounts in which those fines, penalties, taxes, or other charges are to be deposited, not to exceed 10% of the amounts collected, upon appropriation by the Legislature.
This bill would also allow a state agency that enters into an agreement with the board or a county, or a county that enters into an agreement with the board, to impose a cash collection fee in an amount reasonably necessary to recover the collection costs to be incurred by the board or county in dealing with cash payments, not to exceed 10% of any amounts collected. The bill would require the cash collection fee to be determined by the state agency that entered into the agreement, or by the county that entered into the agreement, as applicable, and would require any cash collection fees to be deposited into the funds or accounts in which the fees, fine, penalty, or other charge fines, penalties, or other charges to be collected is are deposited.
(2) The Sales and Use Tax Law, which is administered by the State Board of Equalization, requires any person whose estimated tax liability averages $10,000 or more per month to remit amounts due by electronic funds transfer, but provides an exception to that requirement that authorizes, before January 1, 2022, a person issued a seller’s permit for a place of business that is a dispensary, as defined in MCRSA, to remit amounts due for retail sales at the dispensary by a means other than electronic funds transfer.
Cities, counties, and specified local governmental agencies are authorized to impose sales and use taxes in modified conformity to state sales and use taxes, which are administered and collected by the board on behalf of those agencies pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or in accordance with the Transactions and Use Tax Law.
AUMA, commencing January 1, 2018, imposes an excise tax on the purchase of marijuana and marijuana products, as defined, and a separate cultivation tax on marijuana that enters the commercial market. AUMA provides for the administration of both taxes by the board and requires persons required to be licensed involved in the cultivation and retail sale of marijuana or marijuana products to file a return with the board by a specified date.
This bill would authorize a cannabis-related business, as defined, to remit any amount due under any of the provisions described above to the board by means other than electronic funds transfer, including by the use of cash.
The bill, by January 1, 2019, would require the board to accept cash as a form of remittance from a cannabis-related business for any fee, tax, fine, penalty, interest, or any other charge that the business owes under the laws described above, including the Cannabis State Payment Collection Law, and that business would be authorized by those laws to remit to the board in cash, in at least 50% of the offices managed by the board in each equalization district of the state. The bill, by January 1, 2020, would further require the board to accept cash as a form of remittance for those payments in at least 75% of the branch or district offices managed by the board in each equalization district of the state.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 15630 is added to the Government Code, to read:

15630.
 (a) The State Board of Equalization, by January 1, 2019, shall accept cash as a form of remittance from a cannabis-related business for any fee, tax, fine, penalty, interest, or any other charge that the business owes under laws specified in subdivision (b) and that the business is authorized by those laws to remit to the board in cash, in at least 50 percent of the offices managed by the board in each equalization district of the state. The board, by January 1, 2020, shall accept the payments described in this subdivision in at least 75 percent of the offices managed by the board in each equalization district of the state.
(b) (1) The Sales and Use Tax Law (Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code).
(2) The Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation Code).
(3) Laws imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code).
(4) The Cannabis State Payment Collection Law (Part 13.5 (commencing with Section 31001) of Division 2 of the Revenue and Taxation Code).
(5) Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code.
(c) “Cannabis-related business” means a person that is licensed under, or is seeking to be licensed under, either the Medical Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code) or the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (Division 10 (commencing with Section 26000) of the Business and Professions Code).

SEC. 2.

 Section 6479.3 of the Revenue and Taxation Code is amended to read:

6479.3.
 (a) Except as provided in subdivision (k), any person whose estimated tax liability under this part averages ten thousand dollars ($10,000) or more per month, as determined by the board pursuant to methods of calculation prescribed by the board, shall remit amounts due by an electronic funds transfer under procedures prescribed by the board. Any person who collects use tax on a voluntary basis is not required to remit amounts due by electronic funds transfer.
(b) Any person whose estimated tax liability under this part averages less than ten thousand dollars ($10,000) per month or any person who voluntarily collects use tax may elect to remit amounts due by electronic funds transfer with the approval of the board.
(c) Any person remitting amounts due pursuant to subdivision (a) or (b) shall perform electronic funds transfer in compliance with the due dates set forth in Article 1 (commencing with Section 6451) and Article 1.1 (commencing with Section 6470). Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state’s demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state’s demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed to occur on the date settlement occurs.
(d) Any person remitting taxes by electronic funds transfer shall, on or before the due date of the remittance, file a return for the preceding reporting period in the form and manner prescribed by the board. Any person who fails to timely file the required return shall pay a penalty of 10 percent of the amount of taxes, exclusive of prepayments, with respect to the period for which the return is required.
(e) (1) Except as provided in paragraph (2), any person required to remit taxes pursuant to this article who remits those taxes by means other than appropriate electronic funds transfer shall pay a penalty of 10 percent of the taxes incorrectly remitted.
(2) A person required to remit prepayments pursuant to this article who remits a prepayment by means other than an appropriate electronic funds transfer shall pay a penalty of 6 percent of the prepayment amount incorrectly remitted.
(f) Except as provided in Sections 6476 and 6477, any person who fails to pay any tax to the state or any amount of tax required to be collected and paid to the state, except amounts of determinations made by the board under Article 2 (commencing with Section 6481) or Article 3 (commencing with Section 6511), within the time required shall pay a penalty of 10 percent of the tax or amount of tax, in addition to the tax or amount of tax, plus interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date on which the tax or the amount of tax required to be collected became due and payable to the state until the date of payment.
(g) In determining whether a person’s estimated tax liability averages ten thousand dollars ($10,000) or more per month, the board may consider tax returns filed pursuant to this part and any other information in the board’s possession.
(h) Except as provided in subdivision (i), the penalties imposed by subdivisions (d), (e), and (f) shall be limited to a maximum of 10 percent of the taxes due, exclusive of prepayments, for any one return. Any person remitting taxes by electronic funds transfer shall be subject to the penalties under this section and not Section 6591.
(i) The penalties imposed with respect to paragraph (2) of subdivision (e) and Sections 6476 and 6477 shall be limited to a maximum of 6 percent of the prepayment amount.
(j) The board shall promulgate regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code for purposes of implementing this section.
(k) Before January 1, 2022, a person issued a seller’s permit for a place of business that is a dispensary, as defined in subdivision (n) of Section 19300.5 of the Business and Professions Code, (1) A cannabis-related business may remit amounts due for retail sales at the dispensary by a means other than electronic funds transfer. transfer, including by the use of cash.
(2) For purposes of this subdivision, “cannabis-related business” means a person that is licensed under, or is seeking to be licensed under, either the Medical Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code) or the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (Division 10 (commencing with Section 26000) of the Business and Professions Code).

SEC. 3.

 Section 7204.5 is added to the Revenue and Taxation Code, to read:

7204.5.
 (a) A cannabis-related business may remit any amounts due under a sales or use tax ordinance adopted pursuant to this part to the State Board of Equalization by means other than electronic funds transfer, including by the use of cash.
(b) For purposes of this section, “cannabis-related business” means a person that is licensed under, or is seeking to be licensed under, either the Medical Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code) or the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (Division 10 (commencing with Section 26000) of the Business and Professions Code).

SEC. 4.

 Section 7270.10 is added to the Revenue and Taxation Code, to read:

7270.10.
 (a) A cannabis-related business may remit any amounts due under a transaction and use tax imposed pursuant to this part to the State Board of Equalization by means other than electronic funds transfer, including by the use of cash.
(b) For purposes of this section, “cannabis-related business” means a person that is licensed under, or is seeking to be licensed under, either the Medical Cannabis Regulation and Safety Act (Chapter 3.5 (commencing with Section 19300) of Division 8 of the Business and Professions Code) or the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (Division 10 (commencing with Section 26000) of the Business and Professions Code).

SECTION 1.SEC. 5.

 The heading of Part 13.5 (commencing with Section 31020) of Division 2 of the Revenue and Taxation Code is repealed.

SEC. 2.SEC. 6.

 Part 13.5 (commencing with Section 31001) is added to Division 2 of the Revenue and Taxation Code, to read:

PART 13.5. Cannabis State Payment Collection Law

31001.
 This part shall be known, and may be cited, as the Cannabis State Payment Collection Law.

31002.
 All of the following definitions shall apply for purposes of this part:
(a) “County” means a county and a city and county.
(b) “Regulatory fee” means a charge as defined in paragraph (3) of subdivision (b) of Section 3 of Article XIII A or as defined in paragraph (3) of subdivision (e) of Section 1 of Article XIII C of the California Constitution.
(c) “State agency” means a state entity, as defined in Section 11000 of the Government Code, that administers any fee, fine, penalty, tax, or other charge fees, fines, penalties, taxes, or other charges payable by a cannabis-related business. As used in this part, “state agency” includes, but is not limited to, the following:
(1) The Bureau of Marijuana Control.
(2) The Department of Consumer Affairs.
(3) The Department of Fish and Wildlife.
(4) The Department of Food and Agriculture.
(5) The Department of Pesticide Regulation.
(6) The Employment Development Department.
(7) The Franchise Tax Board.
(8) The regional water boards described in Chapter 4 (commencing with Section 13200) of Division 7 of the Water Code.
(9) The State Department of Public Health.
(10) The State Water Resources Control Board.

31003.
 (a) (1) The board or a county may enter into an agreement with a state agency to collect cash payments for any fee, fine, penalty, tax, or other charge fees, fines, penalties, taxes, or other charges payable to the state agency by a person that is a cannabis-related business in accordance with provisions of this part.
(2) The board may enter into an agreement with a county to collect cash payments in accordance with provisions of this part for any fee, fine, penalty, tax, or other charge fees, fines, penalties, taxes, or other charges payable to the county relating to the cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing of cannabis.
(b) (1) The board shall collect fees, fines, penalties, taxes, and or other charges if the board enters into an agreement with a state agency to make those collections described in paragraph (1) of subdivision (a).
(2) A county shall collect fees, fines, penalties, taxes, and or other charges only if both the board of supervisors of the county and the county tax collector or county treasurer-tax collector approves of entering into an agreement with a state agency to make those collections described in paragraph (1) of subdivision (a).
(3) The board shall collect fees, fines, penalties, taxes, and or other charges if the board enters into an agreement with a county to make those collections described in paragraph (2) of subdivision (a).
(c) (1) For the collection by the board or a county of regulatory fees on behalf of a state agency, or by the board on behalf of a county, pursuant to an agreement authorized by this part, the board or county shall be reimbursed for its costs of collection from the funds or accounts in which those regulatory fees are to be deposited, not to exceed 10 percent of the amounts collected. Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated to the board or county an amount equal to the amount necessary for its costs of collection of regulatory fees on behalf of a state agency, or by the board on behalf of a county, pursuant to an agreement authorized by this part, not to exceed 10 percent of the amounts collected, from the funds or accounts in which those regulatory fees are to be deposited.
(2) For the collection by the board or a county of fees, fines, penalties, taxes, or other charges on behalf of a state agency, or by the board on behalf of a county, pursuant to an agreement authorized by this part, the board or county shall be reimbursed for its costs of collection from the funds or accounts which those fees, fines, penalties, taxes, or other charges are to be deposited, not to exceed 10 percent of the amounts collected, upon appropriation by the Legislature.
(d) (1) A state agency that enters into an agreement with the board or a county, or a county that enters into an agreement with the board, pursuant to the authorization of this part may impose a cash collection fee in an amount reasonably necessary to recover the collection costs to be incurred by the board or county in dealing with cash payments, which may include, but are not limited to, the costs of processing and securing the cash payments, but shall not exceed 10 percent of any amounts collected.
(2) The amount of the cash collection fee shall be determined by the state agency with respect to an agreement described in paragraph (1) of subdivision (a), or by the board of supervisors of a county with respect to an agreement described in paragraph (2) of subdivision (a). A state agency shall not make reimbursement of the board or county under subdivision (c) contingent upon the imposition of a cash collection fee by the state agency or the amount of revenue derived by the state agency from those fees, fines, penalties, or other charges.
(3) A cash collection fee shall not be imposed pursuant to this subdivision if the fee, fine, penalty, or other charge fees, fines, penalties, or other charges already includes include amounts reasonably necessary to recover the collection costs of cash payments.
(4) Any cash collection fees imposed shall be deposited into the funds or accounts which the fee, fine, penalty, or other charge fees, fines, penalties, or other charges to be collected is are deposited.
(5) This subdivision does not authorize a cash collection fee to be imposed for the collection of a tax, as defined in Section 3 of Article XIII A or as defined in Section 1 of Article XIII C of the California Constitution.
(e) An agreement between the board or a county and a state agency, or between the board and a county, shall include all of the following:
(1) A provision that the board or county be reimbursed for the administrative costs of the collection from the funds or accounts which that the fees, fines, penalties, taxes, or other charges are otherwise required by law to be deposited, and shall specify whether that reimbursement is continuously appropriated or made upon appropriation by the Legislature, as described in subdivision (c).
(2) A provision that the board or county transmit the collected moneys to the Treasurer to be deposited in the State Treasury to the credit of the funds or accounts which that the fees, fines, penalties, taxes, or other charges are otherwise required by law to be deposited.
(3) A provision that describes the administrative costs the board or county will incur in carrying out the collection, which costs shall not exceed 10 percent of the moneys collected.
(4) A provision identifying the specific fees, fines, penalties, taxes, and or other charges that will be collected by the board or county under the agreement.
(5) Any other provisions the board or county and state agency agency, or the board and the county, determines is necessary to properly implement the collection of the fees, fines, penalties, taxes, or other charges.
(f) Any agreement to collect those fees, fines, penalties, taxes, or other charges shall not impede or otherwise preclude a county from collecting its own lawfully authorized fees, fines, penalties, taxes, or other charges on a cannabis-related business.

31004.
 Any requirement to pay a state agency via electronic funds transfer shall be deemed to have been met when funds are transferred electronically from a county or the board.

SEC. 7.

 Section 34015 of the Revenue and Taxation Code is amended to read:

34015.
 (a) The marijuana excise tax and cultivation tax imposed by this part is due and payable to the board quarterly on or before the last day of the month following each quarterly period of three months. On or before the last day of the month following each quarterly period, a return for the preceding quarterly period shall be filed with the board by each person required to be licensed for cultivation or retail sale under Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code using electronic media. Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the board. If the cultivation tax is paid by stamp pursuant to subdivision (d) of Section 34012 the board may by regulation determine when and how the tax shall be paid.
(b) The board may require every person engaged in the cultivation, distribution or retail sale of marijuana and marijuana products required to be licensed pursuant to Chapter 3.5 (commencing with Section 19300) of Division 8 or Division 10 (commencing with Section 26000) of the Business and Professions Code to file, on or before the 25th day of each month, a report using electronic media respecting the person’s inventory, purchases, and sales during the preceding month and any other information as the board may require to carry out the purposes of this part. Reports shall be authenticated in a form or pursuant to methods as may be prescribed by the board.
(c) Notwithstanding Section 55050, a person may remit any amount due under the marijuana excise or cultivation tax imposed by this part to the board by means other than electronic funds transfer, including by the use of cash.