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Wednesday, June 12, 2013

HuffPo: Marijuana Industry Lobbies Congress on Taxes

MarijuanaHuffington Post:  Marijuana Industry Lobbies Congress on Taxes:

As the feds weigh their response to the legalization of recreational marijuana in Colorado and Washington, members of the marijuana industry pressed lawmakers this week to change federal tax laws that make it extremely difficult to operate their businesses. ...

The use of medical marijuana is currently legal in 18 states and the District of Columbia, but medical marijuana dispensaries are still subject to strict tax restrictions under Section 280E of the Internal Revenue Code. The law, enacted in 1982, prohibits "deductions incurred in the trade or business of trafficking in controlled substances." As a result, medical marijuana dispensaries are unable to write off standard business expenses, including the cost of rent, payroll, product or advertising, The Huffington Post reported last month. They are also ineligible to claim a tax credit for hiring veterans, and some of them have been hit with audits and heavy tax bills that could eventually force them out of business.

(Hat Tip: Ann Murphy.) Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2013/06/huffpo-.html

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