SOUTH BELOIT, Ill.

The South Beloit City Council has approved a cannabis tax ordinance to prepare for businesses that sell the drug under Illinois’ new recreational marijuana law.

The ordinance imposes a 3% tax on cannabis sales in the city if a cannabis retailer ever locates there. The council also approved an ordinance setting definitions relating to the adult use of cannabis.

The ordinances, approved last week, were based on definitions in the Illinois law related to recreational marijuana use.

“Now we are ready. We have looked at what the city’s responsibilities would be, and we have the groundwork done,” said South Beloit Mayor Ted Rehl. “We’ve been waiting for the state to announce the rules, and now we have them.”

The state recently awarded the first five licenses for selling recreational marijuana to facilities that already dispense medical marijuana. The facilities are in Canton, Effingham, Joliet, Mundelein and Naperville.

The state will issue more licenses in coming weeks, and 75 licenses will be available by Jan. 1, when legal recreational marijuana sales start.

Rehl said the city council wanted to make sure that if such a business opened in South Beloit, the city would receive its share of sales taxes.

Cresco Labs, a cannabis dispensary business, had expressed interest in South Beloit, but Rehl said the company has indicated it is interested in locating farther west.

Illinois municipalities and counties are able to levy additional local sales taxes on cannabis sales. The new law also imposes a 7% gross receipts tax on the sale of marijuana from cultivators to dispensaries, according to the Illinois Policy Institute.

The sales tax in Illinois is 6.3%, and the combined local and state sales taxes in South Beloit currently is 7.25%.

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