Corrected version: A previous version of story incorrectly reported that licensed marijuana processors and retailers would be exempt from Seattle’s business and occupation tax. They would not be.
Marijuana growers would not get a local tax exemption for farmers and agriculture in a proposal by Seattle City Attorney Pete Holmes.
In a letter to City Council members, scheduled to take up the proposal in a Friday committee meeting, Holmes said city law now exempts farmer and agricultural product from paying the city’s business and occupation tax.
The long-standing exemption typically applies to fruits and vegetables was not intended for pot, Holmes explained to the council.
By eliminating the farming exemption, marijuana growers would pay the tax of .215 percent on sales of their marijuana to processors or retailers.
If a grower sold $1 million of marijuana, that would amount to $2,150 in tax revenue for the city.
Holmes said Seattle may be home to more growers than anticipated because of bans and moratoria on legal pot merchants in other cities. Eliminating the exemption “seems like it is a reasonable area the city should look to for revenues to help address the additional burden the city may be taking on,” Holmes told council members in a committee meeting last week.
Council member Nick Licata said Holmes’ proposal was shared with industry stakeholders who seemed to support it.
Holmes’ staff said they couldn’t forecast the potential revenue gained by eliminating the exemption because there is too much uncertainty about the amount and price of pot that will be sold in Seattle.
According to a city estimate, medical marijuana businesses in Seattle paid about $116,000 in business and occupation taxes, also known as business license taxes, in 2012.
Licata’s Finance and Culture Committee is scheduled to consider the proposal at a Friday meeting that starts at noon.