Humboldt County Considers Tax Incentives for Small Cannabis Farms

Humboldt County, California officials are mulling a plan to offer tax incentives to small and older cannabis farms for meeting energy, infrastructure, and footprint standards, according to a Times-Standard report. The incentives amount to a reduction of 10 percent or $1,000 – whichever is greater – on tax payments, with a $5,000 cap.

The county’s old cannabis laws have “less stringent requirements,” according to a county document outlined by the Times-Standard, and the tax incentives would be available to farms licensed under the old standards but operate under the new rules.

“While the federal and state governments, and local utilities, offer tax incentives and rebates based on energy output, project cost or flat dollar amounts, staff is proposing that each incentive simply result in a reduction of a percentage of a cultivator’s tax bill. … This approach provides simplicity in terms of calculating and administering the benefit.” – Humboldt County staff report

The new rules set standards for renewable energy, road maintenance, and provide other incentives for farms smaller than 5,000 square feet.

Third District Supervisor Mike Wilson told the Times-Standard that he wanted sunset provisions on the energy and road incentives and that the small farm plan incentivizes “sprawl.”

Planning and Building Director John Ford argued that the proposal isn’t designed to encourage new permit applications but aims to promote environmental improvements at existing farms.

County staff are expected to bring a firm plan back to the Board of Supervisors. On Tuesday, the board also adjusted its billing process for cannabis cultivators that only force them to begin paying taxes once the plants are on the property.