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CS - Finance - City Marijuana Tax

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1. Who is responsible for paying Eugene’s local marijuana tax?

Eugene’s marijuana tax is a point-of-sale tax on recreational marijuana that is paid by consumers at the time of purchase or sale.

2. Who is responsible for collecting the Eugene Marijuana Tax and remitting tax payments?

All marijuana retailers within Eugene’s city limits that sell recreational marijuana are responsible for collecting the tax from consumers at the point-of-sale.

3. Who is responsible for remitting taxes owed to the City of Eugene?

Marijuana retailers within Eugene’s city limits are responsible for remitting the taxes owed on the sale of recreational marijuana items. If ownership or location of a marijuana retail business changes, the new marijuana retailer is responsible for notifying the Tax Administrator in writing within 30 days.

4. How much does the City of Eugene tax the sale of recreational marijuana items?

Eugene’s Marijuana Tax is equal to 3% of the retail sale price of marijuana items. The City of Eugene Marijuana Tax Ordinance does not allow marijuana retailers to withhold a percentage of the taxes collected to cover the cost of collection and administration of the tax. Example: It’s Easy Being Green, LLC is an OLCC licensed marijuana retailer in Eugene and has $300,000 in April sales, $200,000 in May sales and $100,000 in June sales. This results in a City of Eugene tax liability of $9,000 for April ($300,000 x .03), $6,000 for May ($200,000 x .03) and $3,000 ($100,000 x .03) for June.

5. To whom should marijuana retailers make tax payments?

Eugene is working to finalize an agreement to have the State of Oregon Department of Revenue (DOR) provide tax administration services including tax collection. More information will be provided as it becomes available.

6. When are marijuana retailers required to remit tax payments owed to the City of Eugene?

Marijuana retailers are required to remit taxes collected to the Tax Administrator on a monthly basis for sales beginning January 1, 2017. The taxes collected for each month are 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. Using the previous It’s Easy Being Green example, payment of the April tax liability is due on or before May 31. Payment of the May tax liability is due on or June 30. Payment of the June tax liability is due on or before July 31.

7. What information needs to be included along with the monthly tax payments?

When making a monthly tax payment, marijuana retailers should use the monthly tax payment voucher made available and fill in the requested information. In addition to basic business identification and licensing information, marijuana retailers will need to report the total amount of taxable sales for that month along with the tax amount owed and/or remitted, and any refunds of excess taxes made within that month.

8. How often do marijuana retailers have to file tax returns for the City of Eugene Marijuana Tax?

Marijuana retailers are required to file tax returns on a quarterly basis. 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. Using the previous It’s Easy Being Green example, a quarterly return for the months of April, May and June must be filed by July 31st. Please check back in the coming weeks for more information about where to file quarterly tax returns.

9. What is the penalty and interest for late or unpaid Marijuana Tax liability?

Penalty and interest are imposed if a marijuana retailer mails a return or pays the tax after the due date. The penalty is 5 percent of the unpaid tax. 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. 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. The Tax Administrator may impose a 100 percent penalty for failure to file marijuana tax returns.

10. Who is held responsible if a marijuana retailer fails to file a tax return or collect taxes when due?

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 Administrative Rule 44-16-05, for the returns and payments together with any interest and penalties due. To be held personally liable for unpaid marijuana tax, a 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. A person may be personally liable if he or she 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 individual.

11. Can I file an extension for taxes owed?

Marijuana retailers may file an extension for taxes owed if there is “good cause," meaning circumstances beyond the reasonable control of the marijuana retailer, including death or serious illness of the marijuana retailer or member of the marijuana retailer’s immediate family; destruction by fire, a natural disaster, or other casualty of the marijuana retailer’s home or place of business where records are kept; or the unavoidable and unforeseen absence of the taxpayer from the state that began before the due date of the marijuana tax payment. “Good cause” does not include reliance on a professional, lack of knowledge, mere inability to pay, reliance on an employee or other agent of the marijuana retailer to pay the tax on time or other circumstances that are within the marijuana retailer or representative’s control.

12. What sales and tax information records do marijuana retailers need to keep?

A marijuana retailer must maintain all records and any information and data required to determine the correct tax liability. 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.

13. For marijuana retailers that sell taxable and tax-exempt marijuana items, what sales and tax information records need to be kept?

Records of taxable sales are no different from requirements that apply to marijuana retailers that only sell recreational marijuana items. For tax-exempt marijuana items, retailers must keep additional records including the medical marijuana card number of the purchaser, the marijuana product category, and more in accordance with Administrative Order 44-16-05-F.

14. Can a marijuana retailer appeal a tax liability determination?

Yes, a marijuana retailer can appeal a tax liability determination through procedures set forth in the Oregon Tax Court. 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.

15. Do marijuana retailers have to provide a receipt of sale?

Yes, marijuana retailers must provide a customer a receipt that includes the following information: the marijuana retailer’s business name and address; an identification of items or products on which tax was charged; 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; the total amount of the sale prior to tax; the total state tax amount; the total local tax amount; the total cost to the customer at the point-of-sale; and an alphanumeric or numeric identification that differs on each receipt issued.

16. Can a consumer request a refund for paying more tax than owed?

Yes, a 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.

17. What does Eugene’s Marijuana Tax mean for State marijuana taxes or laws?

Nothing in Eugene’s Marijuana Tax Ordinance or related Administrative Rules are intended to 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.

18. Where can I get more information?

For detailed information on Eugene’s Marijuana Tax, you should read Administrative Order No. 44-16-05-F and Ordinance No. 20566 which are viewable on the City of Eugene's website. For more information on marijuana taxation, licensing or other regulatory information, you can visit the Oregon Liquor Control Commission (OLCC) Recreational Marijuana program site, http://www.oregon.gov/olcc/marijuana.