Taxation: marijuana.

(1) The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA) , an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, commencing January 1, 2018, imposes an excise tax on the purchase of marijuana and marijuana products, as defined, and a separate cultivation tax on marijuana that enters the commercial market, and requires revenues from those taxes, interest, penalties, and other related amounts to be deposited into the California Marijuana Tax Fund, which is continuously appropriated for specified purposes pursuant to a specified schedule. AUMA provides for the administration of both taxes by the State Board of Equalization (board) and requires persons required to be licensed involved in the cultivation and retail sale of marijuana or marijuana products to obtain a separate permit from the board. Under AUMA, a violation of provisions relating to these taxes is a crime unless otherwise specified. This bill would provide for the suspension or revocation of those permits, would authorize the board to deny an application for a permit if the applicant had previously been issued a permit that was suspended or revoked, among other reasons, and would set forth the process for appealing permit suspensions, revocations, and application denials. The bill would also impose specific criminal penalties, including fines and imprisonment, for certain violations of the provisions relating to the cultivation and excise taxes on marijuana. By modifying the scope of a crime and imposing new crimes, the bill would impose a state-mandated local program. As revenues from the fines imposed by the bill would be deposited into the California Marijuana Tax Fund, a continuously appropriated fund, this bill would make an appropriation. (2) Existing sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. Existing law requires a collection of prepayment of retail sales tax at the time that motor vehicle fuel tax or diesel fuel tax is imposed, and on each subsequent sale other than the retail sale, as specified. AUMA authorizes the board to prescribe a method and manner for payment of the marijuana cultivation tax that utilizes tax stamps or state-issued product bags, as specified. This bill, commencing July 1, 2018, would require a wholesaler, which this bill would define as a person that makes a distribution of marijuana or marijuana products to a retailer, to collect prepayments of both marijuana excise tax and sales tax on the marijuana or marijuana products distributed, as specified. The bill would require the wholesaler to provide the retailer with evidence of the prepayment amounts collected and would grant a retailer that retains that evidence and other documents to credits in the amount of the marijuana excise tax and sales tax prepayments against its marijuana excise tax or sales and use tax obligations, respectively, for the same period. The bill would require a wholesaler not required to hold a seller's permit to register with the board, would require all wholesalers to obtain a permit from the board for the purposes of the marijuana taxes, and would authorize the board to require wholesalers to place a security with the board. This bill would authorize the board to prescribe a method and manner for prepayment of the marijuana excise tax that utilizes tax stamps or other markings and would further authorize the board to prescribe a method and manner for collection and remittance of the marijuana cultivation tax by wholesalers, as specified. As a violation of this bill's requirements would be a crime, this bill would impose a state-mandated local program. (3) AUMA exempts from sales and use taxes retail sales of medical cannabis, medical cannabis concentrate, edible medical cannabis products, or topical cannabis, as defined, to qualified patients or primary caregivers that provide identification cards issued under the Medical Marijuana Program and other government-issued identification cards. This bill would revise and recast that provision to exempt from sales and use taxes retail sales of medical cannabis, medical cannabis concentrate, edible medical cannabis products, or topical cannabis to persons with identification cards, as defined, or primary caregivers that provide the above-described identification. The bill would subject a purchaser that furnishes a seller with a false or falsified identification card to specified fines. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (5) AUMA authorizes the Legislature to amend the act to further the purposes and intent of the act with a 23 vote of the membership of each house of the Legislature, except as provided. This bill would declare that it furthers the purposes and intent of AUMA for specified reasons.