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San Jose approves marijuana tax

By Dean Schaffer | 2 Nov 2010

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San Jose voters passed Measure U, a bill that will allow the city to tax marijuana businesses up to 10 percent. The measure’s official description states that revenues will fund “essential City services such as police, fire, emergency response, street maintenance, pothole repair” and other programs.

The measure’s language seems to anticipate the passage of Proposition 19, but the tax will include both nonprofit and for-profit businesses. In other words, with Prop. 19’s defeat, Measure U will still affect medicinal marijuana dispensaries, which must operate as non-profits.

Medicinal marijuana advocate and former marijuana dispensary volunteer Ellen Young criticized Measure U as a burden for medicinal suppliers. “We already pay 9.25 percent sales tax,” she said, “and they want to add another 10 percent? They’re treating it as though it’s a criminal enterprise.”

Council Member Pierluigi Oliverio supported the measure. “I’ve always had the same view, which was a limited number of cannabis facilities in limited places, regulated, and some form of taxation,” he said. The San Jose Budget Office did not return phone calls asking about the measure’s projected budget impact.

The San Jose City Council will hold a study session Dec. 13 to solicit community input on the precise tax rate.

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