HomeMy WebLinkAboutAdmin Order 44-17-02-FADMINISTRATIVE ORDER NO. 44-17-02-F
of the
City Manager
AMENDMENT OF MARIJUANA RETAIL TAX ADMINISTRATIVE
RULE R-3.706 AND REPEAL OF ADMINISTRATIVE ORDER NO. 44-16-
05-F.
The City Manager of the City of Eugene finds that:
A. Pursuant to the authority contained in Sections 2.019, 3.706 and 3.708 of the
Eugene Code, 1971, on December 27, 2016, 1 issued Administrative Order No. 44-16-05-F
adopting Marijuana Retail Tax Administrative Rule R-3,706 to implement the provisions of
Sections 3.700 through 3.710 of that Code, regarding imposition of a 3% tax on the retail sales of
recreational marijuana items sold to consumers within the City ofFugene.
B. On July 28, 2017, 1 issued Administrative Order No. 44-17-02, proposing to amend
Marijuana Retail Tax Administrative Rule R -3.706-C so that it is not inconsistent with DOR's
penalty and interest schedule, thereby enabling DOR to collect penalties and interest on behalf of
the City using the state structure.
C. Notice of the proposed Rule amendment was given by providing copies of the
Notice to the Mayor and City Councilors, making copies available to any person who had requested
such notice and to any business that possessed a license issued pursuant to the Rule. The Notice
was also published in the Register -Guard newspaper on August 6, 7, 8, 9 and 10, 2017, and posted
on the City's website during the 15 -day comment period.
D. The Notice advised that written comments would be received Cor a period of 15
days from August 6, 2017. No comments were received within the time or in the manner set forth
in the Notice.
BASED UPON the above findings and the findings in Administrative Order No. 44-17-
02, and pursuant to the authority contained in Sections 2.019, 3.706 and 3 ).708 of the Eugene Code,
1971, I find that Marijuana Retail Tax Administrative Rule R -3.706-C should be amended as
proposed. Therefore, I order that:
1. Marijuana Retail Tax Administrative Rule R -3.706-C is amended and Rule R-30.706
is set forth below in its entirety.
2. The unamended provisions of Marijuana Retail Tax Administrative Rule R-3.706
adopted by Administrative Order No. 44-16-05-F remain in full force and effect and are
incorporated into the Rules set forth in this Order.
3. Administrative Order No. 44-16-05-F is repealed as of the effective date of this
Order.
Administrative Order - Page I of 9
MARIJUANA RETAIL TAX
ADMINISTRATIVE RULE R-3.706
R -3.706-A DESIGNATION OF THE TAX ADMINISTRATOR.
The Tax Administrator is the City of Eugene Finance Director or any person or entity with
whom the City Manager contracts to perform the tax administration duties.
R-3.706-13 TAX; COLLECTION; FILING, QUARTERLY RETURNS; MONTHLY
PAYMENT SCHEDULE AND METHOD.
1. Beginning January 1, 2017, a marijuana retailer that sells marijuana items within
the City of Eugene, must collect from the consumer at the time of the purchase or sale, a tax equal
to 3% ofthe retail sale price.
2. A marijuana retailer must notify theTax Administrator in writing, within 30 days,
if the status of the marijuana retailer changes including, but not limited to, ownership changes,
address changes, or the marijuana retailer no longer sells marijuana items subject to Eugene's
marijuana tax.
3. A marijuana retailer shall file with the Tax Administrator quarterly tax returns,
which report sales of marijuana items, the Eugene marijuana tax collected, tax due, tax remitted,
and such other information as required by the City. The quarterly returns are due on or before the
last day of January, April, July and October of each year for the previous calendar quarter.
4. A marijuana retailer shall remit the tax collected to the Tax Administrator on a
monthly basis. The taxes collected for each month is due on or before the last day of the following
month. When the due date falls on a Saturday, Sunday or a state legal holiday., the tax payment is
due on the next business day. The total amount of taxable sales for that month must be reported
to the Tax Administrator along with the tax. amount owed and/or remitted, and any refunds of
excess taxes made within that month.
5. If a marijuana retailer refunds excess tax collected to a consumer, pursuant to this
rule, the marijuana retailer must deduct the excess tax refunded from the next tax payment after
which the refund was made.
6. The Tax Administrator will provide payment information, forms for returns and
reports, and payment vouchers to marijuana retailers for use in reporting and paying the marijuana
tax.
7. Marijuana retailers shall pay by cash, check, or money order, or by electronic
payment if available. If paying in cash, an appointment with the Tax Administrator must be made
at least 48 hours in advance.
Administrative Order - Page 2 of 9
8. The 'Fax Administrator will provide a receipt for payments made in person. The
receipt will identify the tax amount paid, the tax period or other applicable account information to
which the tax payment will be applied, the name of the payor, the business identification number
or social security number, and the date the tax payment was paid.
1. The penalties and interest amounts owed to the City of Eugene from late or unpaid
retail marijuana tax payments should be paid to the Tax Administrator.
2. The penalty and interest schedule for late or unpaid tax amounts is as follows:
(a) Penalty and interest are imposed if the marijuana retailer mails a return or
pays the tax after the due date.
(b) The penalty is 5 percent of the unpaid tax if the taxpayer fails to file a return
or pay the tax by the due date.
(c) If a return is filed more than 30 days after the due date, an additional penalty
of 20 percent of the tax due is imposed.
(d) Interest is imposed on any unpaid tax from the due date until the date
payment in full is received. The interest rate is 4 percent annually.
3. The Tax Administrator may impose a 100 percent penalty for consecutive failure
to file marijuana tax returns or intent to evade the tax. The filing due dates of Eugene marijuana
tax returns are set forth in Rule R-3.706-13.31. The 100 percent penalty may be imposed if:
(a)
f -
(a) Taxpayer fails to file a return with intent to evade the tax or falsely prepares
and files a return with intent to evade the tax; or
(b) The taxpayer was required to file Eugene marijuana tax returns:
(1) In at least one quarter during, each tax year of three or more
consecutive years; and
(2) All Eugene marijuana tax returns due during the three-year period
are not tiled by the due date (including extensions) of the return required for the
fourth quarter of the third consecutive year.
4. Notwithstanding subsections 2.(b) and (d), and 3. above, if the City Manager
contracts with the State of Oregon to administer the tax:
Administrative Order - Page 3 of 9
(a) The penalty amount shall be the amount established by the State of Oregon
pursuant to state statutes and administrative rules, including but not limited to, ORS
.314.400.
(b) The interest rate shall be the rate established by the State of Oregon pursuant
to state statutes and administrative rules, including but not limited to ORS 305.220, ORS
305.222 and OAR 150-305-140.
R-3.706-1) LIABILITY FOR UNPAID MARIJUANA TAX.
1. It is the duty of a marijuana retailer to hold in trust any amount of marijuana tax
collected from the retail sale of marijuana items and to assume custodial liability for amounts to
be paid.
2. If a marijuana retailer fails to file returns or to pay any collected marijuana tax when
due, any or all officers, members, and employees may be held personally responsible, as provided
in this rule, for the returns and payments together with any interest and penalties due.
3. The Tax Administrator may issue a Notice of Liability or Notice of Determination
and Assessment naming any officer, member., or employee as liable for unpaid marijuana tax.
4. To be held personally liable for unpaid marijuana tax, a person must be a marijuana
retailer. In addition, the person must be in a position to pay the marijuana tax or direct the payment
of the marijuana tax at the time the duty arises to collect or pay over the marijuana taxes. The
person may be personally liable if the individual was, or should have been aware, that the
marijuana taxes were not paid to the Tax Administrator. A marijuana retailer cannot avoid
personal liability by delegating their responsibilities to another.
5. The following factors do not preclude a finding that an individual is liable for the
payment of marijuana taxes:
(a) Lack of willfulness in failing to pay over the required marijuana tax;
(b) The individual's receipt of remuneration;
(c) Maintenance of full-time employment elsewhere;
(d) Another individual is also liable for the same marijuana taxes'.
(e) A corporate bylaw or partnership agreement position description to the
contrary;
(f) Absence of signatory authority on a business bank account;
(g) Absence of bookkeeping or recordkeeping duties;
Administrative Order - Page 4 of 9
(h) Absence of authority to hire, fire, and to set working conditions and
schedules; or
Delegation to another person any functions indicating liability.
R -3.706-E FILING AN EXTENSION OF TAXES OWED FOR GOOD CAUSE.
1. For purposes of this rule, "good cause" means circumstances beyond the reasonable
control of the marijuana retailer, including but not limited to:
(a) Death or serious illness of the marijuana retailer or member of the marijuana
retailer's immediate family;
(b) Destruction by fire, a natural disaster, or other casualty of the marijuana
retailer's home, place of business, or records needed to prepare the returns and remit
payment; and
(c) Unavoidable and unforeseen absence of the taxpayer from the state that
began before the due date of the marijuana tax payment.
2. For purposes of this rule, *',(,00d cause" does not include:
(a) Reliance on a professional to merely prepare a return and remit the
marijuana tax payment on time,
(b) Reliance on an employee or other agent of the marijuana retailer to merely
prepare a return and remit the marijuana tax payment on time;
(c) Lack of knowledge about filing deadlines or requirements;
(d) Mere inability to of the marijuana retailer to pay the marijuana tax; and
(e) Other circumstances that are within the control ol'the marijuana retailer or
its representatives.
3. If, for good cause., a n-tarij uana retailer is unable to file a marijuana tax return within
the prescribed time according to Rule P,-3.706-13, the Tax Administrator may grant the marijuana
retailer an extension of time for filing the return. '-f'he extension for filing a return does not extend
the time for payment of the marijuana tax.
4. A marijuana retailer may request a 30 -day extension to file a return of marijuana
tax by submitting to the Tax Administrator a written request for extension. The marijuana retailer
must file the extension request and remit the marijuana tax on or before the due date for the tax
Administrative Order - Page 5 of 9
period for which the extension is requested. The Tax Administrator's decision whether to grant
an extension request for good cause will be based upon the facts and circumstances in each case.
5. Each written request for an extension to file a marijuana tax return must contain the
name and address of the marijuana retailer the tax period associated with the request, and an
explanation of the reason for requesting additional time to file the return.
6. If the extension to file a marijuana tax return is granted, the marijuana retailer Must
file the return within 30 days of the original due date of the return.
7. The Tax Administrator may require documentary proof to substantiate assertions
of good cause when making a determination whether an extension to file a return is warranted.
R -3.706-F ACCOUNTING AND RECORD KEEPING RESPONSIBILITIES.
1. A marijuana retailer must maintain all records and any information and data
required to determine the correct tax liability under Eugene's Ordinance No. 20566. Every
marijuana retailer must keep and preserve, in a generally- accepted accounting format used for
reporting revenue and taxes due on business activity, detailed records of all sales made. The
marijuana retailer must maintain all required records for a period of five years from the time to
which the record relates, or for as long as the marijuana retailer retains the marijuana items to
which the record relates, whichever is later.
2. If a marijuana retailer sells taxable and tax-exempt marijuana items (medical
marijuana items sold to medical marijuana cardholders), records of such tax-exempt sales must be
kept and include the following:
(a) The date of the sale;
(b) The medical marijuana card number;
(c) The taxed marijuana product category, including but not limited to,
marijuana leaves, marijuana flowers, immature marijuana plants, cannabinoid edibles,
cannabinoid concentrates, cannabinoid extracts, cannabinoid products intended to be used
by apply to skin or hair, and cannabinoid products other than as described in this Rule R-
3.706 -F;
(d) The name of the maTij Uana product,
(e) The unit price of the marijuana product;
(f) The number of units sold; and
(g) The total amount of the sale.
Administrative Order - Page 6 of 9
3. If a marijuana retailer maintains records required to be retained under this rule in
both machine -sensible and hard -copy formats, the marijuana retailer shall make the records
available to the Tax Administrator in machine -sensible format upon request. The manner in which
the Tax Administrator is provided access to machine -sensible records may be satisfied through a
variety of means that shall take into account a marijuana retailer's facts and circumstances through
consultation with the marijuana retailer. Nothing in this rule prevents the Tax Administrator from
requesting hard copy print outs in lieu of machine- sensible records.
4. Nothing in this rule shall be construed to prohibit a marijUana retailer from
demonstrating tax compliance with traditional hard -copy documents or reproductions thereof, in
whole or in part, whether or not such marijuana retailer also has retained or has the capability to
retain records oil electronic or other storage media.
5. Regardless of whether the marijuana retailer maintains the required documents in
hard copy or machine -sensible format, the documents shall exhibit a high degree of legibility and
readability. For this purpose, legibility is defined as the quality of a letter or numeral that enables
the observer to identify it positively and quickly to the exclusion of all other letters or numerals.
Readability is defined as the quality of a group of letters or numerals being recognizable as words
or complete numbers.
6. Business Process Information. Upon the request of the Tax Administrator, the
marijuana retailer shall provide a description of the business process that created the retained
records. Such description shall include the relationship between the records and the tax documents
prepared by the marijuana retailer and the measures employed to ensure the integrity of the records.
R -3.706-G AUDITS.
The Tax Administrator, or any person or representative authorized by the City, may
examine or cause be examined during normal business hours, and upon notification to the
marijuana retailer, any books, papers, records., or memoranda relating to the marijuana retailer's
sales and taxes collected, including copies of the marijuana retailer's state and federal income tax
returns, for the purposes of verifying the accuracy of any tax payments made, or to ascertain or
estimate any tax deficiencies and the tax amount required to be paid to the City.
irii iil;iiriiii iI M INK"WWO 0
A marijuana retailer who is aggrieved by a determination of tax liability by the Tax
Administrator may appeal the determination through the procedures set forth in Section 2.021 of
Eugene Code, 1971. A marijuana retailer who wishes to appeal shall also contact the Tax
Administrator within 15 days of the date of the notice of determination of tax liability.
Administrative Order - Page 7 of 9
R-3.706-1 INFORMATION TO INCLUDE ON CONSUMER RECEIPTS.
A marijuana retailer must provide customers a written or printed receipt at the point-of-
sale of all marijuana items that includes,., but is not limited to:
1. The marijuana retailer's business name and address;
2. An identification of items or products on which tax was charged;
3. The category of tax product for each item or product sold, either as a heading for a
group of items or products or as information associated with an individual item or product name;
4. The total amount or the sale prior to tax;
5. The total state tax amount;
6. The total local tax amount;
7. The total Cost to the Customer at the point-of-sale; and
8. An alphanumeric or numeric identification that differs on each receipt issued.
R -3.706-J CONSUMER REFUND OF EXCESS MARIJUANA TAX COLLECTED.
1'. If a consumer asserts that the actual amount of marijuana tax paid to a marijuana
retailer was computed on an amount that is not taxable or is in excess of the correct tax amount,
the consumer may request a refund of the overpayment of marijuana tax in writing to the marijuana
retailer where the excess marijuana tax was paid. The request shall be mailed or delivered to the
marijuana retailer within 30 days of the date of the excess tax payment.
2. Written notification of excess marijuana tax paid and any request for refund shall
include the marijuana retailer's business name, nature of the excess marijuana tax paid, remedy
requested and a receipt clearly identifying the date of purchase and proof of payment of the excess
marijuana tax.
3. If, within 60 days of the date of the original request for refund by the consumer, the
marijuana retailer does not return the excess tax to the consumer, the consumer may appeal to the
Tax Administrator by filing a written appeal within 120 days of the date of the original request for
refund.
4. The Tax Administrator must refund to a consumer the excess marijuana taxes when
shown by satisfactory proof that.
(a) The consumer paid excess marijuana tax to a marijuana retailer;
Administrative Order - Page 8 of 9
(b) The excess marijuana tax was not refunded to the consumer by the
marijuana retailer; and
(e) The consumer made a timely request for refund of excess marij Liana tax paid
as established in this rule.
S. The Tax Administrator or marijuana retailer may not consider any request for
refund of excess marijuana tax if the consumer is unable to provide a receipt that clearly identifies
the date of purchase and proof of payment of the excess marijuana tax.
R -3.706-K NO EFFECT ON STATE LAW REQUIREMENTS.
Nothing in this rule is intended affect or relieve marijuana retailers of any obligations under state
laws and rules, including the obligations to pay any state marijuana taxes, file returns and
maintain records.
Dated and effective this Z' day of 2017.
I!S' Jon R. Ruiz
City Manager
Administrative Order - Page 9 of 9