Taxation of Medical Marijuana Collectives - Los Angeles Municipal Code Sec. 21.50 FAQsWhat is Los Angeles Municipal Code Section 21.50?
On March 8, 2011, the voters of the City of Los Angeles approved Proposition M, which added Section 21.50 to the Los Angeles Municipal Code (LAMC). Section 21.50 imposes a general tax on every person engaged in operating or otherwise conducting a medical marijuana collective not otherwise specifically taxed by other business tax provisions of Article I, Chapter 2 of the LAMC.What is the implementing ordinance to add Sec. 21.50 to the LAMC?
Ordinance No. 181638 (please see related link).What is the effective date of Ordinance No. 181638?
The voter approved ordinance is effective April 18, 2011.Who is subject to this tax?
Any person engaged in operating or otherwise conducting a medical marijuana collective not otherwise specifically taxed by other business tax provisions of Article I, Chapter 2 of the LAMC.What is meant by a "medical marijuana collective"?
For purposes of LAMC Sec. 21.50, a "medical marijuana collective" means any activity regulated or permitted by Article 5.1 of the LAMC or Health and Safety Code sections 11362.5, et. seq., that involves planting, cultivating, harvesting, transporting, dispensing, delivering, providing, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing any part of the marijuana plant for medical purposes.What is the tax based on?
The tax imposed by LAMC Sec. 21.50 applies to a medical marijuana collective's gross receipts.What is the definition of gross receipts?
For purposes of this section, "gross receipts" includes all amounts that would be considered gross receipts under section 21.00, including without limitation membership dues; the value of in-kind contributions; reimbursements provided by members, regardless of form; and anything else of value obtained by a medical marijuana collective.What is the tax rate?
The tax rate is $60.00 for each $1,000 of gross receipts or fractional part thereof.If I operate or otherwise conduct the activity of a medical marijuana collective what am I required to do regarding LAMC Sec. 21.50?
If your business activity is included in the description of a medical marijuana collective and you or your employees conduct business within the City of Los Angeles, you are required to register with the Office of Finance and obtain a Business Tax Registration Certificate.How can I access an application for a Business Tax Registration Certificate?
You may visit one of the various Office of Finance public offices to obtain an application. In addition, an application is accessible on our website, please see related link.I am currently registered with the Office of Finance and presently have a Business Tax Registration Certificate for other fund classes. What must I do if I operate or otherwise conduct the activity of a medical marijuana collective?
Every person engaged in business within the City of Los Angeles is required to obtain a Business Tax Registration Certificate that includes all applicable fund classes for activities engaged in by the person. Therefore, you would need to update your Business Tax Registration Certificate to add the medical marijuana collective fund class.If I am currently operating or conducting the activity of a medical marijuana collective in the City of Los Angeles, is there a registration deadline to obtain a Business Tax Registration Certificate for the Sec. 21.50 medical marijuana collective activity?
Yes, you are required to register and obtain a Business Tax Registration Certificate with the Office of Finance by October 31, 2011.May I request an exemption from the tax imposed by LAMC Sec. 21.50?
All taxpayers subject to this section must pay the full tax imposed by this section regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in the Los Angeles Municipal Code, except as required by California or Federal Law.
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