ONTARIO – Tuesday night the Ontario City Council approved a resolution that urges the Oregon Legislature boost the local tax on retail marijuana sales in town.
The proposal – crafted by Ontario Mayor Riley Hill – will push the tax rate marijuana dispensary owners pay to 35 percent. Now the state levies a 17 percent tax on all retail marijuana sales and the city adds as 3 percent charge. Hill’s resolution would allow the city to raise the local tax up to 18 percent, if approved by the state.
The city’s approval of the resolution is the first step in what could be a long road that will eventually require approval of the Oregon Legislature and local voters.
“This is a multistep process,” said city attorney Larry Sullivan. “First, this goes to the legislature. The legislature decides whether or not to approve it. If the legislature approves it, it comes back to the city council. The city council then debates what to do with it.”
Tuesday night, the council listened to comments from the public both for, and against, the proposal. Last week the city’s ad hoc marijuana advisory committee voted against the proposal.
Adam Brown, Ontario city manager, told the council he was in favor of the resolution because research indicated that the price of marijuana is inelastic.
“Price changes don’t impact its demand,” said Brown. “I think it’s a rate that can be tolerated by the community.”
Brown added that Ontario has “limited time to benefit from this boon of revenue,” because Idaho may not be too far off from marijuana legalization.
“I’m approving the idea of this to give citizens the chance, if the legislature says it could be done, to put whatever tax they want on it. It doesn’t matter what my beliefs are, whether I want it or not, it’s going to be up to the citizens,” said Ontario councilor Norm Crume.
Crume explained that he and councilors Dan Capron and Michael Braden drafted an alternative version of Hill’s proposal that includes “a considerable amount of changes.”
“What we’ve tried to do is put very careful wording in here, where the gist of this is, if the legislature is obliged or wants to give access to more tax — that’d be the first thing that has to happen,” said Crume. “Then it’d come back and be put on ballot measure for people to vote on it.”
Councilor Freddy Rodriguez said he was in support of a resolution to increase the local tax, but recommended an amendment to include an exemption for veterans and people living below the poverty level from paying any additional marijuana tax greater than 3 percent.
The council shot down Rodriguez’s proposed amendment to the resolution.
State Rep. Lynn Findley said Wednesday morning he has not yet framed a bill based on Hill’s resolution.