The Sonoma County Board of Supervisors has approved a temporary tax cut of 45 percent for cannabis cultivation through June 30, 2023.
The cut is retroactive to July 1, 2021, according to a news release issued by county officials.
Supervisors said the cut is intended to mitigate financial hardship on local growers.
“We were putting people out of business with our policy, so this is the right thing to do,” said District 4 Supervisor James Gore, board chair. “The reduced cultivation tax rates are needed to account for changes in the market and our Board’s policy direction.”
County officials said revenue loss from the tax reduction will be offset by an existing surplus that is projected to grow even further beyond program operating costs. County tax revenue collected in fiscal year 2020-21 from 183 permitted cannabis operators has totaled $3,634,230, compared to $2 million in estimated annual operating costs.
“The revenue surplus in our cannabis program will support operational costs for two years as we transition to a new tax model and policy framework,” Gore said in the news release. “We’re committed to getting this issue right for Sonoma County, and that means continuing to work between neighborhoods and industry advocates, learning from other counties, and finding local solutions that are fair and sustainable for both communities and the environment.”
On April 5, county staff will present the board with an amended ordinance reflecting the tax policy decision as well as a resolution extending the Jan. 31 and April 30 due dates to May 31 for cultivation tax payments. The board previously extended the Jan. 31 tax installment due date for all cannabis taxes to April 30.