San Luis Obispo County cuts cannabis business tax to 6% starting Oct. 1

The San Luis Obispo County Board of Supervisors adopted an ordinance Tuesday, August 4, reducing the county cannabis business tax from 8% to 6% for businesses operating in unincorporated county areas.

The lower rate takes effect October 1, 2026. Until then, affected businesses must continue collecting and remitting the 8% rate for transactions in the July, August and September reporting periods, through September 30.

What changes October 1

The ordinance lowers the county cannabis business tax by two percentage points for businesses operating outside incorporated cities. The reduced 6% rate applies to transactions occurring on or after October 1, according to the San Luis Obispo County Auditor-Controller-Treasurer-Tax Collector.

Transactions from July through September remain subject to the 8% rate and must be reported and remitted under the normal filing schedule. For example, the county says taxes collected during the July 2026 period are due by August 31, 2026.

City businesses are not automatically covered

The change applies to cannabis businesses in unincorporated San Luis Obispo County. It does not automatically change the tax rate for businesses inside the City of San Luis Obispo or the county’s other incorporated cities.

The county tax collector advises cannabis businesses operating within the county’s seven incorporated cities to consult their respective city authorities about local tax obligations. Businesses should not assume the county ordinance changes a rate imposed by a city government.

Projected budget impact

County staff estimated that the reduced rate would produce about $600,000 in cannabis business tax revenue during fiscal 2026-27, compared with approximately $800,000 if the 8% rate remained in place.

That is a projected reduction of roughly $200,000 in county revenue. The figures are estimates for the county budget, not guaranteed collections.

What affected businesses should do

Cannabis businesses in unincorporated county areas should continue collecting and remitting the 8% rate through September 30. The 6% rate begins with transactions dated October 1 and later.

The county’s tax collector notice provides the operative dates and filing guidance. Businesses with questions about the county tax can contact the Auditor-Controller-Treasurer-Tax Collector’s Public Service team.

The adopted ordinance creates a two-part transition: an 8% rate remains in effect through September 30, followed by a 6% rate beginning October 1. The geographic limitation is equally important: the county action does not establish tax policy for incorporated cities.

Sources

• San Luis Obispo County tax collector notice
• San Luis Obispo County Board of Supervisors agenda staff report