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City may face lawsuit on marijuana tax

Resident Doug Heuer questions city's authority to approve local tax prior to November vote

An upcoming lawsuit against the city of Newberg aims to clarify the tax the City Council approved on the transfer of marijuana prior to the passage of Measure 91 in November.

Doug Heuer filed the lawsuit in early December, asking the city to declare by what authority it levied the tax.

“They’re going against the will of the voters,” Heuer said. “The voters had put it in with Measure 91 that the state would (be the one to have taxing authority).”

Heuer cited a proposed 40 percent tax on marijuana in the city of Fairview and said that case is illustrative of the problem with cities taxing pot.

“Part of the strategy is to eliminate distribution,” he said.

This is a similar strategy that played into a Newberg City Council decision last year to place a moratorium on pot dispensaries for a year, Heuer said.

“In a sense the city is saying they don’t want it in the city,” he said.

The lawsuit against Newberg comes as cities across Oregon are facing similar fights over marijuana taxation. Measure 91 contains clear language prohibiting cities from placing local taxes on marijuana. Despite this prohibition, Newberg and dozens of cities across the state approved local taxes on recreational and, in some cases, medical marijuana.

Heuer, who said he does not have prior experiencing suing the city, began this effort by himself. Since he’s been working on it, though, he said he’s heard from several lawyers who have expressed interest in joining the effort.

Heuer has not received an official response from the city yet, but City Attorney Truman Stone said he is aware of the suit and has been in contact with Heuer.

“I found out about Doug’s lawsuit by reading (The Newberg Graphic) during breakfast, there was a notice in the legal section,” Stone said in an email. “The city has yet to be served with the lawsuit, so I can’t speak to any specifics.”

Heuer has posted details of the suit on his Facebook page and will serve the city with an amended version for the official filing.

“Generally, he is challenging the ordinance that set the marijuana tax,” Stone said.

The court still needs a few more documents to be filed, at which point Heuer will get together with the city and begin to work toward the final goal of “Narrowing the issue down to what it is, which is (who has) the ability to tax it. Then let the judge decide.”

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