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AB-725 Cannabis tax: penalty.(2021-2022)



Current Version: 03/18/21 - Amended Assembly

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AB725:v98#DOCUMENT

Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 725

Introduced by Assembly Member Ward

February 16, 2021

An act to amend Section 34013 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 725, as amended, Ward. Cannabis tax: penalty.
Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), approved by the voters as Proposition 64 at the November 8, 2016, statewide general election, regulates the cultivation, distribution, transport, storage, manufacturing, testing, processing, sale, and use of marijuana for nonmedical purposes by people 21 years of age and older. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.
AUMA imposes an excise tax on the purchase of cannabis and cannabis products at the rate of 15% of the average market price of any retail sale by a cannabis retailer, as specified. AUMA, and as additionally amended by statute, also imposes a cultivation tax upon all cultivators on all harvested cannabis that enters the commercial market, at specified rates per dry-weight ounce of cannabis flowers and leaves. AUMA imposes a monetary penalty, among other things, on a licensee who fails to pay the excise or cultivation tax of at least 1/2 of the amount of taxes not paid.
AUMA requires these taxes and penalties, among other amounts collected, to be deposited in the California Cannabis Tax Fund, a continuously appropriated fund, for specified purposes required under AUMA.
This bill would remove the monetary penalty imposed on a licensee who fails to pay the excise or cultivation tax enacted by AUMA. AUMA, but would retain the monetary penalty on a person who is required to be licensed under AUMA but who is not licensed, and who fails to pay the excise or cultivation taxes, as specified.
AUMA authorizes the Legislature to amend its provisions with a2/3vote of both houses to further its purposes and intent.
This bill would declare that its provisions further specified purposes and intent of the act.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 34013 of the Revenue and Taxation Code is amended to read:

34013.
 (a)  The department shall administer and collect the taxes imposed by this part pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)). For purposes of this part, the references in the Fee Collection Procedures Law to “fee” shall include the taxes imposed by this part, and references to “feepayer” shall include a person required to pay or collect the taxes imposed by this part.
(b) Until January 1, 2022, subdivision (a) of Section 55050 shall not apply to a person required to pay or collect the taxes imposed by this part on a person licensed to engage in commercial cannabis activity under Division 10 (commencing with Section 26000) of the Business and Professions Code if the department deems it necessary to facilitate the collection of amounts due.
(c) The department may prescribe, adopt, and enforce regulations relating to the administration and enforcement of this part, including, but not limited to, collections, reporting, refunds, and appeals.
(d) The department shall adopt necessary rules and regulations to administer the taxes in this part. Such rules and regulations may include methods or procedures to tag cannabis or cannabis products, or the packages thereof, to designate prior tax payment.
(e) Until January 1, 2019, the department may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer, and enforce its duties under this division. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption.
(f) (1) Any person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code who fails to pay the taxes imposed under this part shall, in addition to owing the taxes not paid, be subject to having its license revoked pursuant to Section 26031 of the Business and Professions Code.
(2) Any person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code but who is not licensed, and who fails to pay the taxes imposed under this part, shall owe the taxes not paid and be subject to a penalty of at least one-half the amount of the taxes not paid.
(g) The department may bring such legal actions as are necessary to collect any deficiency in the tax required to be paid, and, upon the department’s request, the Attorney General shall bring the actions.

SEC. 2.

 The Legislature finds and declares that this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act, enacted as Proposition 64 at the November 8, 2016, statewide general election.