A new congressional bill to allow marijuana businesses to take federal tax deductions that are available to other industries would actually result in the government bringing in more revenue, the House sponsor said on the eve of the cannabis holiday 4/20.
Rep. Earl Blumenauer (D-OR), founder of the Congressional Cannabis Caucus, spoke about his recently refiled tax legislation, as well as the prospects of interstate marijuana commerce and the tension between efforts to enact reform incrementally and comprehensively, during a press briefing on Wednesday.
The congressman told Marijuana Moment that his Small Business Tax Equity Act would address the “hopelessly unfair” and “outmoded” Internal Revenue Service (IRS) code known as 280E that prohibits state-legal cannabis businesses from making federal deductions, driving up effective tax rate.
Asked how he planned to sell the proposal to members who might balk at losing tax revenue by authorizing the cannabis business deductions, Blumenauer said that he believes the reform would ultimately generate additional tax dollars.
There’s “an understanding that having 280E is a disincentive for people to fully and fairly reports or taxes,” he said. “As long as people are not able to fully deduct their taxes, there will be efforts to try and
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