Washington, D.C. – Today, Representatives Carlos Curbelo (FL–26) and Earl Blumenauer (OR–3) introduced the Small Business Tax Equity Act of 2017, H.R. 1810. This legislation will amend Section 280E of the Internal Revenue Code to allow marijuana businesses operating in compliance with state law to utilize common tax deductions and credits.
Section 280E currently prohibits businesses that sell Schedule I or Schedule II substances from deducting legitimate expenses from their taxes. Congress added this prohibition in 1982 after a drug dealer claimed expenses associated with selling narcotics as legitimate business expenses. Marijuana is a Schedule I substance, and therefore, even marijuana businesses operating in compliance with state law are not allowed to deduct the common expenses of running a small business, like rent, most utilities, and payroll.
“One of my goals in Congress is to ensure the law treats all enterprises with fairness and equity; giving them the opportunity to grow and prosper,” Curbelo said. “This bill clarifies our federal tax code for those marijuana businesses operating legally and in compliance with state regulations by providing tax parity. The IRS code should afford all businesses selling legal products the opportunity to make appropriate deductions. This legislation is consistent with our federalist model of government, respecting states’ rights and the decisions made voters all across the country.”
“As more states follow Oregon’s leadership in legalizing and regulating marijuana, too many businesses are trapped between federal and state laws. It’s not right, and it’s not fair,” said Blumenauer. “This discriminatory tax law undercuts the effort to bring this industry out of the shadows, advance the rule of law, and tilts the playing field against small businesses that are following state laws and creating jobs.”
This bill is endorsed by the following organizations: Americans for Tax Reform, the National Cannabis Industry Association, Drug Policy Alliance, Marijuana Policy Project, Americans for Safe Access, & NORML
In the 2016 elections, the State of Florida voted overwhelming with 71.3% to legalize the use of medical marijuana. The two counties that comprise Florida’s 26th Congressional District, Monroe and Miami-Dade, voted in favor of the measure 80.3% and 68.3%, respectively.