We wife and I submitted joint testimony to the cities of Forest Grove, Cornelius, and Hillsboro regarding their proposed ordinances to establish marijuana sales taxes in 2014.
The testimony submitted to Hillsboro is below. The others were very similar.
We urge you to not adopt a marijuana sales tax ordinance. You are considering this ordinance now because Measure 91, if it passes, would remove your authority to tax marijuana. You have been informed that there is a chance that if you establish a tax on marijuana before Measure 91 passes, your tax might be grandfathered in. You have been misinformed.
Here is the text of Section 42 of Measure 91, which makes grandfathering seem possible:
SECTION 42. State has exclusive right to tax marijuana.
No county or city of this state shall impose any fee or tax, including occupation taxes, privilege taxes and inspection fees, in connection with the purchase, sale, production, processing, transportation, and delivery of marijuana items.
You can argue that this is ambiguous because "shall impose" might refer only to future taxes, not existing ones. But, it might be read to prohibit taxing at any time. The memorandum from your staff is clear that if you pass this ordinance, the meaning of this section would likely be decided by a court.
Conspicuously absent from that memorandum, however, is any mention of Section 58 of Measure 91, which reads:
SECTION 58. Marijuana laws supersede and repeal inconsistent charters and ordinances.
Sections 3 to 70 of this Act, designed to operate uniformly throughout the state, shall be paramount and superior to and shall fully replace and supersede any and all municipal charter enactments or local ordinances inconsistent with it. Such charters and ordinances hereby are repealed.
This removes any possible ambiguity. Your proposed ordinance is clearly inconsistent with Section 42, and consequently would be affirmatively repealed by Section 58. You shouldn't adopt an ordinance that you know will crumble under a legal challenge. At least understand the legal strategy you would use to defend it, and judge whether it would embarrass the city, before adopting the ordinance.
We are bothered by the appearance of the city trying to tax something merely because you're about to lose the opportunity to do so. It plays into the worst stereotypes of money-grubbing government. Alternately, this tax is meant to discourage these businesses from locating in the city, a not-in-my-backyard attitude trying to control every backyard in the city.
We are concerned that this tax would be so obviously contrary to the intent of Section 42. If the voters approve Measure 91, they are approving exclusive State control of marijuana taxation, and you should be ashamed that you are trying to circumvent the will of the voters.
Finally, we are bothered by the prospect of this city wasting taxpayer money, as well as plaintiff's money, in litigation over an ordinance that would inevitably be overturned by a court. Unless you have a very clever legal argument up your sleeves, attempting to defend this ordinance could be seen as frivolous and would expose both the city and your attorney to possible sanctions from the court.
If you understand all of this and still want to adopt this ordinance in order to "send a message" that marijuana is not welcome in your city, be mindful that you are also sending the messages that this city council is money-grubbing, overreaching, out of touch, and reckless in legal matters that are likely to end up costing taxpayer money. Is that what you want?
All three cities adopted marijuana sales tax ordinances over our objections.