ST. CHARLES – Aldermen are discussing implementing a 3 % tax on recreational marijuana sales after leaning in favor of allowing up to two recreational marijuana dispensaries in the city.
Aldermen discussed the issue at the Sept. 3 meeting of the City Council's Government Operations Committee. The majority of aldermen recommended implementing the tax.
As St. Charles Finance Director Chris Minick told aldermen, the 3% tax would be in addition to all other taxes and fees applicable to recreational cannabis sales in the city. He said the city currently receives 2% of the gross sales price of general merchandise sales, making the applicable local sales tax equal 5% of the gross amount of recreational cannabis sales.
Current state law does not allow for the implementation of a local tax on recreational marijuana sales until September 1, 2020. However, the Illinois Municipal League is requesting a change in the law that would allow for locally imposed taxes to be effective Jan. 1, 2020, coinciding with the date allowing recreational marijuana sales in the state, Minick said.
"The Illinois Department of Revenue does require 90 days notice to process changes to local sales tax, so the Illinois Municipal League is recommending that any municipality that would like to implement the sales tax on recreational sales of cannabis needs to pass that ordinance and certify it to the Department of Revenue prior to Oct. 1, 2019," Minick said. "The local sales tax could then be implemented on Jan. 1."
Minick has said the city could see $1 million in sales tax revenue per $20 million in recreational marijuana sales. Second Ward Alderman Rita Anne Payleitner, First Ward Alderman Ronald Silkaitis and Second Ward Alderman Arthur Lemke voted against implementing the tax.
"I'm continuing my stance to pump the brakes on this," Payleitner said. "We need to take a little time on all levels before we move forward."
Third Ward Alderman William Turner was among the majority of the aldermen recommending the tax.
"I'd rather be safe than sorry," Turner said.
Fifth Ward Alderman Maureen Lewis, who chairs the Government Operations Committee, said implementing the tax would be premature since the City Council has not formally decided whether the city should allow recreational marijuana sales.
"I think it's premature myself, taxing something we don't even have in existence," she said.
At the City Council's Aug. 19 Government Operations Committee meeting, aldermen voted 6-3 to direct city staff to begin the zoning process for two recreational sales facilities, one on the east side of St. Charles and one on the west side.
The city's zoning ordinance would have to be changed to allow the retail sale of marijuana.
The city's Plan Commission will now hold a public hearing on the issue. As part of the committee's recommendation, recreation marijuana dispensaries would be allowed as a special use in districts zoned for community businesses and regional businesses and that no more than two dispensaries could be located in the city – one on the east side and one on the west side of the Fox River.
In addition, businesses must have operated a licensed medical marijuana dispensary for at least two years. On-premise consumption lounges and production and distribution facilities would not be permitted as part of the committee's recommendation.
Beginning Jan. 1, the law will allow Illinois residents 21 and older to possess up to 30 grams of marijuana per Illinois resident. Residents also will be able to possess 5 grams of cannabis concentrate and up to 500 milligrams of THC – the main psychoactive compound in marijuana that gives the high sensation – contained in a cannabis-infused product. Nonresidents can possess half those amounts.
Registered medical marijuana patients will be allowed to grow up to five cannabis plants in their home and possess more than 30 grams of cannabis if it is grown and secured in their residence under certain conditions.