As marijuana tax reform efforts petered out on Capitol Hill, another endeavor is before the U.S. Tax Court to let state-legal cannabis businesses take deductions and credits.
The owners of a marijuana dispensary in Palisade, Colo., claim their income was unjustly taxed twice because of the Internal Revenue Service’s application of Section 280E, a tax code that disallows credits and deductions from income generated by sales of controlled substances.
Jesse and Desa Loughman, owners of Colorado Alternative Health Care, recently filed a brief in U.S. Tax Court, challenging the IRS’ determination of taxes owed for 2010, 2011 and 2012.
“It’s an example of some of the absurdity that results when you take a 1982 tax law that was passed not based on accounting principals, but based on a concept that drug dealers were bad and that public policy didn’t allow regulated (cannabis operations),” Rachel Gillette, the GreenspoonMarder P.A. attorney representing the Loughmans, told The Cannabist.
“While I understand it’s not the sexiest issue, it is the illustration of why the application of 280E is antiquated in this industry.”
Read the rest of this story at TheCannabist.co