Palm Springs City Council may reduce cannabis tax to compete with other cities

The Palm Springs City Council will discuss a proposed resolution that will reduce their tax rates for marijuana manufacture, transportation, and testing facilities during their meeting tonight.

City manager David Ready said the hope is this will help make Palm Springs more competitive with other cities in attracting and maintaining cannabis business.

The marijuana tax rate in Palm Springs is currently 10 percent, a little higher than the average, according to Ready.

“When we created these taxes, to begin with, we were all sort of in this new world, afraid of what our expenses were going to be. So now, we’re reducing the tax and it won’t affect our revenues, it won’t affect our services, but it will make us more competitive.”

According to Ready, Palm Springs has collected $2,330,348 in cannabis tax revenue from 2017 to 2019. $51,511 of that revenue appears to be manufacturing and/or transportation and distribution facility revenue.

The proposed new tax rate will reduce the tax for manufacturing facilities to 2 percent and will completely suspend the tax for transportation, distribution, and testing facilities.

The 10 percent tax will remain on marijuana sales.

According to Ready, the proposed Resolution would be effective immediately if passed.

Reporter Jake Ingrassia will cover the council meeting Wednesday on News Channel 3 starting at 5 p.m.

You can reach Jake on Twitter, Facebook or email him at jake.ingrassia@kesq.com.