The OLCC introduced a number of modifications to the tax compliance rule this weekend on the Hashish & Psychedelic Part of the Oregon Bar Affiliation’s annual conference (the place I used to be happy to reasonable a panel on the failures of legalization). This rule has been a scorching matter in Oregon hashish for a number of months and the OLCC will likely be enacting everlasting guidelines on this situation quickly.
We’ve written concerning the tax compliance rule on a number of events: e.g. right here, right here and right here. For now, right here’s a fast refresher on the topic. On June 15, 2023, the OLCC approved momentary guidelines requiring marijuana retailers to acquire a Certificates of Tax Compliance (“Certificates”) from the Oregon Division of Income (“DOR”) as a situation for buying or renewing a marijuana retailer license, in addition to for modifications of possession and including somebody to a license. These new guidelines resulted from a directive by Governor Kotek following the La Mota scandal that led to the resignation of the Oregon Secretary of State, Shemia Fagan.
In brief, the momentary rule utilized to marijuana retailers, not processors, producers, or wholesalers. The rule mandated that each “applicant” on a license submit a certificates of tax compliance from the Oregon Division of Income (“DOR”) on the time of software, or on the time of license renewal, and in reference to sure modifications of possession.
The OLCC is poised to enact everlasting guidelines that may substitute the momentary guidelines. Listed below are a couple of key factors the OLCC shared with us on the convention in italics, adopted by my commentary:
- The everlasting tax compliance rule will not increase to incorporate processors, producers, or wholesalers. This had been a topic of some debate up to now few months. The choice to solely require retailers to submit tax compliance certificates is sensible as a result of the issue giving rise to the rule was the non-remittance of gross sales tax collected at factors of sale. In Oregon, such tax is simply collected on the retail degree. So reaching the purpose of well timed and full remittance of gross sales taxes doesn’t require the involvement of non-retail licensees.
- Means to function after an incomplete renewal software in restricted circumstances. The tax compliance rule includes the DOR well timed issuing the certificates of compliance. However what if the DOR is backlogged? Properly, the everlasting rule contemplates that for renewals submitted previous to expiration or inside 30 days after expiration, the licensee might proceed to function for a further 30 days after the expiration of their license with out the certificates of tax compliance if:
- The retailer has submitted an in any other case full renewal software on or earlier than the license expiration date or inside 30 days after the expiration of the license;
- The retailer gives documentation, in a kind and method prescribed by the Fee, displaying the retailer is actively engaged within the strategy of acquiring the required DOR certificates
This isn’t an excuse to not well timed search a certificates! Because the OLCC said this weekend, the purpose is to not cull licenses from good religion licensees who discover themselves unable to well timed procure a certificates. The OLCC needs to work with licensees to resolve points with acquiring tax compliance certificates. Certainly, the OLCC might grant a further 60-Day extension to the timeframe if the Fee determines the extension within reason needed to acquire DOR certificates. However this obligates licensees to work with the OLCC and DOR in good religion in doing so. Plan forward and maintain the OLCC apprised of points with acquiring certificates of tax compliance!
- Failure to supply required certificates will end result within the renewal software being thought-about incomplete. This isn’t a change from the momentary rule, however its significance bears repeating. An incomplete software means no license renewal, which implies no promoting hashish. Though licensees can submit a written request for reconsideration of a choice that an software is incomplete, there isn’t any proper to a listening to presently contemplated. So this isn’t akin to receiving a charging doc for license cancellation.
Keep tuned for extra on the tax compliance rule and for additional studying, see the OLCC’s FAQ and overview on the brand new rule here and here.