Santa Barbara County in California is considering a strict law that could shut down cannabis businesses if they fail to pay their taxes within 30 days.
The measure has received initial approval from the county’s Board of Supervisors, but a second vote is required before it becomes law, reported SFGATE.
Some officials have expressed concerns about the severe punishment, comparing it to a “death penalty” for businesses that don’t pay taxes. Supervisor Steve Lavagnino initially opposed the measure but changed his vote after learning that companies have a 30-day grace period to pay their taxes. However, if they pay even a day late, they will lose their license.
Santa Barbara County is a major hub for cannabis farming and production in California, rivaling Humboldt County in the north.
Tax payments have been a growing concern for the entire state’s cannabis industry, with many companies facing significant debts. Hundreds of cannabis stores missed a crucial tax deadline for state taxes this year. Santa Barbara County imposes a 4% tax on cannabis cultivators’ business revenue, which must be paid quarterly. The county has struggled to collect taxes from these businesses, allowing some farmers to delay payment for nearly a year.
The proposed law aims to revoke a business license immediately if a cannabis company is more than 30 days late on a quarterly tax bill. There would be no exceptions, regardless of the company’s overall compliance.
Supervisor Das Williams voted in favor of the measure but expressed concern that the severe penalties would likely lead to the closure of most companies. He pointed out that this standard is not applied elsewhere and could have adverse consequences if universally enforced.
“This is a standard that nobody else lives by,” Williams told SFGATE. “If we all lived by this standard … we would all probably lose our job at some point.”
The final vote on the amendment is scheduled for next week, and if it passes, it will take effect on August 10.