A growing number of marijuana businesses are taking advantage of a tax strategy that might reduce the costly financial burden imposed by Section 280E of the federal tax code.
Small businesses with a gross income of less than $27 million are able to deduct expenses to a “near-legal” degree, according to accountants specializing in cannabis.
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By one estimate, marijuana companies paid nearly $2 billion more in federal taxes than mainstream businesses.
But not all certified public accountants are on board with using the relatively new tax strategy, and they warn cannabis entrepreneurs that using it could be risky.
Section 280E currently prevents plant-touching companies from deducting many traditional business expenses because marijuana remains a Schedule 1 substance and illegal under federal law.
In recent years, a growing number of accountants and professionals specializing in cannabis discovered a small business provision within 2017’s Tax Cuts and Jobs
Read full article on Marijuana Business Daily
