The bill, filed by a key Republican congressman would prevent marijuana companies from claiming federal tax deductions for code 280E of the Internal Revenue Service. This is true even if cannabis were federally rescheduled. His unique position on a powerful panel could help ensure that the bill is passed through budget legislation.
Rep. Jodey Arrington (R-TX), chair of the House Budget Committee, introduced the legislation on Friday—about two weeks after Republican senators came out with their chamber’s version of the bill.
It would also maintain the tax barrier that currently exists for the cannabis sector, which is closely watching the process by the federal government to shift marijuana from Schedule I (CSA) into Schedule III. They are doing so because they want it to address the 280E problems under the law.
Whether there’s sufficient appetite to pass the proposal as a standalone in either GOP-controlled chamber is unclear—but its prospects could increase demonstrably if Arrington exercises his influence over the budget reconciliation process by pushing for the bill’s inclusion in the larger legislation that’s in the works.
The Washington Post reported that Arrington views the issue of cannabis taxes from a “values standpoint”. While marijuana may not be on his budget priorities, the 280E legislation he is now sponsoring might end up in large-scale legislation.
The text of the bill has not yet been released, but the title is the same as that of a Senate proposal from Senators James Lankford (R-OK) and Pete Ricketts (R-NE). James Lankford, R-OK and Pete Ricketts, R-NE have introduced a bill called “No Deductions for Marijuana Businesses Act.”
Blake Moore (R) (UT), Pete Sessions R (TX), Vern Bucanan R (FL), Greg Murphy R (NC), Chuck Edwards R (NC), and Gary Palmer R (AL) are also co-sponsors of the new House legislation.
While rescheduling isn’t a guarantee—and Drug Enforcement Administration (DEA) hearings on the proposal have been delayed—the anti-cannabis lawmakers are aiming to preemptively take the wind out of the industry’s sails.
Bill would change the IRS code so that businesses working with marijuana, as well as all Schedule I or Schedule II drugs would no longer be able to claim tax deductions.
Smart Approaches to Marijuana has claimed credit for proposing the Senate Bill and applauds the House Measure’s strong backing.
Rep. Jodey Arntt (R-Texas), chairman of the House Budget Committee, drives the reconciliation process. He has the first say.
Weed. Weed.”
— SAM (@learnaboutsam) February 24, 2025
Another Republican congressman, Rep. Brian Mast, (R-FL), introduced recently a bill that would provide military veterans access to medical cannabis.
Rep. Greg Steube, R-FL has filed separately a proposal to prevent military veterans losing their government benefits if they use medical marijuana in accordance with state laws.
The advocates and stakeholders also await the reintroduction by the bipartisan of a second proposal which would prevent banks from facing penalties for simply working with cannabis businesses that are legal in their state.
The GOP House sponsor of the Secure and Fair Enforcement (SAFE) Banking Act will be filing it again this year, but a spokesperson for his office told MEDCAN24 last month that the introduction is “not imminent” as some recent reports have suggested.
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Side Pocket Images. Image courtesy Chris Wallis.