Republican Senators James Lankford of Oklahoma and Pete Ricketts of Nebraska filed a bill last week that would kill the 280e tax hopes even if cannabis was moved to a lower scheduled controlled substance. This bill has the title “No Deductions For Marijuana Businesses Act.”
This bill aims to amend Section 280E, which prevents cannabis businesses from deducting normal business expenses. This tax deduction is essential to business profitability. Rescheduling was expected to allow the industry to begin taking these tax deductions, and to become more profitable.
According to the new bill, marijuana will not qualify for tax breaks because it is a drug listed in Schedules 1 and 2.
‘No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in— ‘‘(1) marijuana (as defined in section 102(16) of the Controlled Substances Act (21 U.S.C. 802(16))), or ‘‘(2) controlled substances (within the meaning of schedule I and II of the Controlled Substances Act),
Smart Approaches to Marijuana Chief Executive Kevin Sabet. This legislation will prevent deficits while making sure that the taxpayers are not on the hook for tax write offs made by people who violate federal laws and poison our children. Last year, when SAM’s team of federal affairs pitched this bill to Senator Lankford, it was a mere pipe dream. The senator’s office took this idea seriously in just two months. He showed courage by standing up and taking action. “We look forward to seeing this bill gain support and being included in the package of budget reconciliation.”
It’s not that simple
John Fraser, the leader of Dykema Gossett PLLC’s cannabis law practice, said to Law360 that he doubted that this bill would pass, given how popular cannabis reform has become across all demographics.
Fraser, in an interview with Law360: “I doubt that the bill will ever become law.” I doubt that it will make it past committee.
David Culver is the senior vice-president of public affairs for the U.S. Cannabis Council. He said Friday that “the American people are overwhelmingly in favor of banking reform and cannabis reclassification.” The legislation proposed is right out of prohibitionists’ playbook. It would give a boost to the illegal market, and hurt legal cannabis users if it were passed. “Regulated cannabis companies simply want to treat them like other businesses.”
Read more at: https://www.law360.com/cannabis/articles/2294575/gop-sens-file-bill-to-make-pot-co-tax-penalty-permanent-?copied=1
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