South Lake Tahoe Slashes Cannabis Taxes by 3%

SOUTH LAKE TAHOE, Calif. – With only three members voting, the South Lake Tahoe City Council approved a resolution on Tuesday that reduced the cannabis tax rate from six percent to three percent while continuing to exempt the tax for medical cannabis. In the same motion, they approved a resolution to eliminate the public safety mitigation fee. Due to Cody Bass having to recuse himself since he owns a cannabis business, Scott Robbins acted as mayor during the agenda item.

When local voters approved Measure G in 2022, they supported replacing an existing community benefit fee with a formal cannabis and professions tax of up to six percent. The two amounts were estimated to be about equal at the time, and the tax was based on sales instead of a fixed fee. Since then, the City has had a formal six percent tax on cannabis, which is a pass-through tax and paid for by customers.

In Tuesday's council action, that cannabis tax was cut in half after cannabis business owners said it was too high and was forcing customers away. Several local nonprofits that are beneficiaries of the current Cannabis Community Grant program spoke up during public comment. In 2021, the City Council pledged support for those nonprofits in the community who worked to mitigate the negative effects of cannabis in the community. Last year, the City took in $900,000 through cannabis taxes and divided up $450,000 among nonprofits that applied and went through the process. The other $450,000 went to a dedicated police officer, snow removal, and roads through the general fund.

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