Oregon Senate Bill SB1135

Oregon 2025 Regular Session

• Introduced: 2/27/25
• Refer: 3/3/25

Caption

Relating to county taxes on marijuana production sites; prescribing an effective date; providing for revenue raising that requires approval by a three-fifths majority.

Summary

SB 1135 authorizes a narrow class of Oregon counties to levy a local tax on marijuana production sites. Under current law, the state largely controls taxation of marijuana production, processing, and sales, with limited local authority over retail sales taxes. This bill adds a new exception for “qualifying counties,” allowing them to refer to voters an ordinance imposing up to a 3 percent tax on marijuana produced in the county’s unincorporated area when that product is sold or transferred outside the county. The measure also preserves existing local authority for city and county taxes on marijuana sales, subject to voter approval and the 3 percent cap. The bill defines a qualifying county by reference to historic federal Secure Rural Schools payments and by requiring that the county not have banned marijuana production facilities. The new county production tax would apply only to marijuana grown at licensed production sites or designated medical grow sites, and it would not apply to purchases by registry cardholders or designated primary caregivers for cardholders. The tax authority would take effect for marijuana produced on or after January 1, 2026, and the act itself would take effect 91 days after adjournment sine die.

Impact

SB 1135 would amend ORS 475C.453 to create a new local taxing authority for certain counties, carving out an exception to the state’s general preemption of local taxes and fees on marijuana production, processing, and sales. It would affect marijuana producers, licensed cannabis businesses, and county governments in qualifying rural counties, while leaving medical cardholders and caregivers exempt from the new tax. The bill also requires voter approval for any county ordinance imposing the tax and limits the rate to 3 percent, with implementation coordinated by the Oregon Health Authority and the Oregon Liquor and Cannabis Commission.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available materials. Based on the bill text, the measure appears designed to provide additional revenue options for certain rural counties that historically relied on federal timber-related payments, suggesting a fiscal and local-government-oriented rationale. The absence of recorded discussion makes the overall sentiment difficult to gauge beyond the bill’s revenue-raising intent and its narrow, targeted structure.

Contention

The main points of contention likely concern whether counties should be allowed to tax marijuana production at all, and whether the bill creates a special tax regime for a limited set of counties based on historical federal payment criteria. Potential opponents may object to added costs on cannabis producers and to differential treatment among counties, while supporters may emphasize local revenue needs and the bill’s voter-approval requirement. Another possible issue is the exemption for medical marijuana cardholders and caregivers, which narrows the tax’s reach and may reflect an effort to balance revenue generation with patient protections.