N.J. Stat. § 40:48I-1

Current through L. 2024, c. 87.

Section 40:48I-1 - Optional local cannabis transfer tax and user tax

Optional Local Cannabis Transfer Tax and User Tax.

a.

(1) A municipality may adopt an ordinance imposing a transfer tax on the sale of cannabis or cannabis items by a cannabis establishment or a holder of a plenary wholesale license or plenary retail distribution license selling an intoxicating hemp beverage in accordance with section 5 of P.L.2024, c.73 (C.24:6I-48.2) that is located in the municipality. At the discretion of the municipality, the tax may be imposed on: receipts from the sale of cannabis by a cannabis cultivator to another cannabis cultivator; receipts from the sale of cannabis items from one cannabis establishment to another cannabis establishment; receipts from the retail sales of cannabis items or intoxicating hemp beverages by a cannabis retailer or a holder of a plenary wholesale license or plenary retail distribution license to retail consumers who are 21 years of age or older; or any combination thereof. Each municipality shall set its own rate or rates, but in no case shall a rate exceed: two percent of the receipts from each sale by a cannabis cultivator; two percent of the receipts from each sale by a cannabis manufacturer; one percent of the receipts from each sale by a cannabis wholesaler; and two percent of the receipts from each sale by a cannabis retailer or holder of a plenary wholesale license or plenary retail distribution license.

(2) A local tax ordinance adopted pursuant to paragraph (1) of this subsection shall also include provisions for imposing a user tax, at the equivalent transfer tax rates, on any concurrent license holder, as permitted by section 33 of P.L. 2021, c. 16 (C.24:6I-46), operating more than one cannabis establishment, or on any concurrent holder of plenary wholesale licenses or plenary retail distribution licenses. The user tax shall be imposed on the value of each transfer or use of cannabis or cannabis items not otherwise subject to the transfer tax imposed pursuant to paragraph (1) of this subsection, from the license holder's establishment that is located in the municipality to any of the other license holder's establishments, whether located in the municipality or another municipality.

b.

(1) A transfer tax or user tax imposed pursuant to this section shall be in addition to any other tax imposed by law. Any transaction for which the transfer tax or user tax is imposed, or could be imposed, pursuant to this section, other than those which generate receipts from the retail sales by cannabis retailers or a holder of a plenary wholesale license or plenary retail distribution license, shall be exempt from the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The transfer tax or user tax shall be collected or paid, and remitted to the municipality by the cannabis establishment or the holder of the plenary wholesale license or plenary retail distributor license from the cannabis establishment, plenary wholesale license holder, or plenary retail distributor purchasing or receiving the cannabis or cannabis item, or from the consumer at the point of sale, on behalf of the municipality by the cannabis retailer, plenary wholesale license holder, or plenary retail distributor selling the cannabis item to that consumer. The transfer tax or user tax shall be stated, charged, and shown separately on any sales slip, invoice, receipt, or other statement or memorandum of the price paid or payable, or equivalent value of the transfer, for the cannabis or cannabis item.

(2) Every cannabis establishment, plenary wholesale license holder, or plenary retail distributor required to collect a transfer tax or user tax imposed by ordinance pursuant to this section shall be personally liable for the transfer tax or user tax imposed, collected, or required to be collected under this section. Any cannabis establishment, plenary wholesale license holder, or plenary retail distributor shall have the same right with respect to collecting the transfer tax or user tax from another cannabis establishment, plenary retail distributor, plenary whole license holder, or the consumer as if the transfer tax or user tax was a part of the sale and payable at the same time, or with respect to non-payment of the transfer tax or user tax by the cannabis establishment, plenary retail distributor, plenary whole license holder, or consumer, as if the transfer tax or user tax was a part of the purchase price of the cannabis or cannabis item, or equivalent value of the transfer of the cannabis or cannabis item, and payable at the same time, provided, however, that the chief fiscal officer of the municipality which imposes the transfer tax or user tax shall be joined as a party in any action or proceeding brought to collect the transfer tax or user tax.

(3) No cannabis establishment, plenary wholesale license holder, or plenary retail distributor required to collect a transfer tax or user tax imposed by ordinance pursuant to this section shall advertise or hold out to any person or to the public in general, in any manner, directly or indirectly, that the transfer tax or user tax will not be separately charged and stated to another cannabis establishment, plenary retail distributor, plenary whole license holder, or the consumer, or that the transfer tax or user tax will be refunded to the cannabis establishment, plenary retail distributor, plenary whole license holder, or the consumer.

c.

(1) All revenues collected from a transfer tax or user tax imposed by ordinance pursuant to this section shall be remitted to the chief financial officer of the municipality in a manner prescribed by the municipality. The chief financial officer shall collect and administer any transfer tax or user tax imposed by ordinance pursuant to this section. The municipality shall enforce the payment of delinquent taxes or transfer fees imposed by ordinance pursuant to this section in the same manner as provided for municipal real property taxes.

(2)

(a) In the event that the transfer tax or user tax imposed by ordinance pursuant to this section is not paid as and when due by a cannabis establishment, plenary wholesale license holder, or plenary retail distributor, the unpaid balance, and any interest accruing thereon, shall be a lien on the parcel of real property comprising the cannabis establishment's, plenary wholesale license holder's, or plenary retail distributor's premises in the same manner as all other unpaid municipal taxes, fees, or other charges. The lien shall be superior and paramount to the interest in the parcel of any owner, lessee, tenant, mortgagee, or other person, except the lien of municipal taxes, and shall be on a parity with and deemed equal to the municipal lien on the parcel for unpaid property taxes due and owing in the same year.

(b) A municipality shall file in the office of its tax collector a statement showing the amount and due date of the unpaid balance and identifying the lot and block number of the parcel of real property that comprises the delinquent cannabis establishment's, plenary wholesale license holder's, or plenary retail distributor's premises. The lien shall be enforced as a municipal lien in the same manner as all other municipal liens are enforced.

d. As used in this section:

"Cannabis" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Cannabis cultivator" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Cannabis establishment" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Cannabis items" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Cannabis manufacturer" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Cannabis retailer" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Cannabis wholesaler" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Consumer" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

"Premises" means the same as that term is defined in section 3 of P.L. 2021, c. 16 (C.24:6I-33).

N.J.S. § 40:48I-1

Amended by L. 2024 , c. 73, s. 9, eff. 10/12/2024.

Added by L. 2021 , c. 16, s. 40, eff. 2/22/2021.