California’s Recent News On Taxes – Water, Gas And Cannabis

Monika Miles, California Taxes, Water Tax, Gas Tax, Cannabis Tax

Have you been keeping up with California’s recent news regarding taxes? From cannabis to tap water and gas, California’s various tax legislation would impact all residents. Here’s a recap of each one.

California’s Taxes on Gas

Senate Bill 1 increased gas taxes by 12 cents per gallon, diesel fuel 20 cents per gallon and raised vehicle fees. The legislation was approved by both the Legislature and the governor back in April and is projected to raise $5.4 billion a year for road and transit projects. While the tax revenue is earmarked for important work within the state, 51 percent of registered voters report they’d repeal the tax if it were placed on the statewide ballot in November.

California’s Taxes on Water

That’s right – there is proposed legislation to tax water. As the first taxes on tap water in California’s history, the revenue, “Would go toward addressing drinking water tainted with arsenic and other contaminants in the San Joaquin Valley.” Both residents and businesses would be responsible for the tax, with an increase of either 95 cents or $15 per month on their water bills, depending on which legislation passes.

While opponents to the bill agree the clean water concerns need to be addressed, they believe the legislation would, “Make it harder for low-income residents to afford this necessity. A precedent-setting tax also could lead to additional taxes on water for a variety of project and programs.”

California’s Taxes on Cannabis

One of California’s taxes that is definitely bringing in much-needed revenue is on cannabis. In fact, during the first quarter of 2018, the state saw $60.9 million generated from cultivation, excise and sales taxes; the figure doesn’t include local tax revenue that cities and counties collected from the industry.

Two new cannabis taxes began this past January, “A cultivation tax on all harvested cannabis that enters the commercial market and a 15 percent excise tax on the purchase of cannabis and cannabis products.” In the first quarter alone, the cultivation tax brought in $1.6 million and the excise tax generated $32 million of the total $60.9 million.

What do you think of these taxes California is imposing? Do you agree the gas tax should be repealed, or do you think it’s a good solution to the state’s road and transit projects? What about the water tax? Do you think it should pass?

Have a state tax question? Contact Monika Miles.

 

Monika founded Miles Consulting Group which focuses on multi-state tax consulting, helping clients navigate state tax issues such as sales tax and income tax in interstate commerce, including e-commerce.

Prior to forming the firm, Monika worked for 12 years combined in Big 4 Public Accounting and private industry. Monika has provided such services as federal and state income/franchise tax compliance and consulting, sales/use tax consulting, audit support, and credits and incentives reviews. She has served clients in a variety of industries including manufacturing, technology, telecommunications, construction, utility, retail and financial institutions.

Monika graduated from the University of Texas at El Paso (UTEP) with a BBA in Accounting/Finance and has a Masters in Taxation from San Jose State University.

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