skip to Main Content
Banking Solutions Available Despite Difficulty Tax Code Causes for Cannabis Industry

The Current State of 280E and Recent Legal Action

The impact of tax code Section 280E removes a marijuana-related business’s ability to claim tax breaks as normal commercial, medical, or agricultural businesses. Effectively, 280E forbids businesses from deducting business expenses, other than the cost of goods sold, from income if the taxpayer’s trade or business is associated with the trafficking of Schedule I or II substances, as defined by the Controlled Substances Act.

The Standing Akimbo LLC v. United States case in the Supreme Court was one of the most notable recent legal actions taken against 280E. Supreme Court Justice Clarence Thomas rendered an opinion that clarified the government’s position. Several weeks after this decision, then acting Solicitor General Elizabeth Prelogar stated clearly in a brief commenting on Speidell v. United States, that lower courts have been correct in ruling that state-legal marijuana businesses can be investigated by the Internal Revenue Service for potential violations of Section 280E.

In terms of the cannabis industry, there are no exceptions when it comes to Section 280E. There have been multiple cases over the last 12 months, even at the Supreme Court level, and in each instance, the Departments of Justice’s and Treasury’s position has been clarified that as long as a business involves a Schedule I substance, nothing will change in the tax laws.

The Path Forward

We have the MORE Act, the SAFE Banking Act, and nearly 47 states working on some form of legalization, with seven new markets opening just within the last nine months. Although the current administration isn’t making cannabis legalization a priority, they have confirmed that they won’t allocate any Department of Justice resources to marijuana enforcement action in a state where it is legal. Unless, of course, it involves anti-money laundering or Bank Secrecy Act (BSA) issues inside the industry. [Read More @ Bloomberg Tax]

This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Stories

CDTFA Cannabis Creditor: Myths and Truths

By Hilary Bricken, Attorney at Husch Blackwell Dealing with creditors is never a fun experience. However, some creditors are more severe than others, especially in the cannabis industry. One of…

If FL Supreme Court approves cannabis ballot language, will voters go for recreational weed or not?

The long wait on whether Floridians will get a chance to vote to legalize recreational cannabis for adults 21 and older is almost over, as the Florida Supreme Court is…

Missouri strips marijuana licenses connected to company accused of predatory behavior

Missouri’s health department on Wednesday stripped two coveted marijuana micro-licenses tied to an out-of-state company that had been accused of predatory practices and had listed the licenses for resale. The…

Dug In: Big Island Grown’s Deep Cannabis Roots

Big Island Grown (BIG) is a vertically integrated cannabis company based in Kailua-Kona, Hawaii County, on the Big Island of Hawaii, whose reach now extends to several islands in the…

More Categories

Back To Top
×Close search
Search