A congressman has reintroduced a bill that would amend an Internal Revenue Service (IRS) code known as 280E to allow state-legal marijuana businesses to finally take federal tax deductions that are available to companies in other industries.
Rep. Earl Blumenauer, founder of the Congressional Cannabis Caucus, refiled the Small Business Tax Equity Act on Monday. The measure been introduced several times over recent sessions but has never advanced to a hearing or vote.
“State-legal cannabis businesses are denied equal treatment under 280E,” Blumenauer said in a press release. “They cannot fully deduct the cost of doing business which means they pay two or three times as much as a similar non-cannabis business.”
“This grotesquely unfair treatment incentivizes people to cut corners,” he said. “If Congress wants to get serious about supporting small businesses and ending the illicit cannabis market, it is commonsense that we allow legal cannabis operations to deduct business expenses, just like any other industry.”
The IRS code that’s currently in place, 280E, makes it so businesses whose activities consist of “trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act)” cannot make deduct most business expenses from their federal taxes
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