Follow us:

The Today File

Your guide to the latest news from around the Northwest

February 18, 2014 at 4:28 PM

City Council considers ditching tax break for pot growers

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.

Comments | Topics: marijuana, Pete Holmes, Seattle City Council


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►