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Tigard approves tax on weed shops

City officials say tax will recoup cost of additional police


Tigard city officials have imposed a tax on the sale of marijuana, despite a ban on stores from selling the drug until May of next year.The city of Tigard has approved a plan to tax marijuana shops and medical dispensaries in the city.

The City Council voted unanimously Tuesday night to tax sales of marijuana and marijuana-infused products, should voters approve Measure 91 later this year.

Voters will decide in November on a plan to legalize recreational marijuana use, similar to laws enacted in Washington and Colorado.

Measure 91 would allow the possession, manufacturing and sale of marijuana across the state for the first time.

Tigard city officials began considering a tax on marijuana sales two weeks ago, suggesting a5 percent gross receipts tax on medical marijuana sales and a 10 percent tax on recreational marijuana sales and sales of marijuana-infused products.

Tuesday’s vote also included a yearly tax of $500 on establishments, such as restaurants or bars that allow marijuana to be consumed on their premises, and people who grow marijuana within the city would be charged a $1,000 per year “privilege tax.”

Tigard joins a growing list of cities that have imposed taxes on marijuana sales in light of November's election. Hillsboro, Forest Grove, Ashland, Scappoose, Milwaukie and Wilsonville have all approved plans to tax recreational sales of the drug.

Yet Tigard's tax plan comes despite a standing ban on all types of marijuana dispensaries in the city until May 2015.

City leaders imposed the ban in February, saying they needed time to figure out proper rules for medical marijuana dispensaries, which were legalized by the Oregon Legislature last year.

City officials said they needed to consider land-use regulations such as where dispensaries could operate and their hours of operation.

That work is still being completed, and the city is accepting public comment about how marijuana retailers should be regulated within the city.

What do you think?

Have thoughts on how marijuana dispensaries should be regulated in Tigard? Share them with the city.

But is it legal?

Tuesday's tax is meant to recoup the cost of additional police officers and other resources that are expected to be needed should marijuana be legalized, said City Councilor Marc Woodard.

“If Measure 91 does pass, I think it’s fair that there should be some form of taxation," said Woodard, who is currently running for his second term on the council. “This will help us pay for policing services that will, most likely, be necessary as well as a lot of unforeseen things we can’t predict.”

There is concern, however, that the tax may not be enforceable.

Measure 91 expressly prohibits cities and counties from imposing taxes on sales of the drug, but Toby LaFrance, Tigard’s director of finance, said the measure does not address existing taxes.

“Where it is silent is if a local jurisdiction already has a tax on the books, whether it could impose that tax,” LaFrance said.

Whether or not the city will be able to follow through with its plan will be up to the courts to decide, LaFrance said.

Tigard Mayor John L. Cook said that if the city wants to try, it has to have a tax in place before the November election.

“Over time, we’ll be able to figure out what the right number (to tax) is,” Cook said. “Having this on the books will allow us to do this. It could be that 13 percent (for recreational sales) and 2 percent (for medical marijuana sales) are the right numbers that we want. The 5 (percent) and 10 (percent) numbers are just placeholders.”

Tualatin, Lake Oswego, Portland and Oregon City are also considering taxes on marijuana sales.

The Tualatin City Council is set to vote on its tax at a special meeting on Monday, Sept. 29.

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