Two Republican U.S. senators have introduced a bill that would continue to ban federal tax deductions for the cannabis industry – regardless of whether marijuana is rescheduled.
According to Law360, James Lankford of Oklahoma and Pete Ricketts of Nebraska introduced the “No Deductions for Marijuana Businesses Act,” which would essentially kill any substantive tax breaks operators hoped to receive if marijuana status were downgraded from Schedule 1 to Schedule 3 of the Controlled Substance Act.
Under Internal Revenue Code Section 280E, cannabis operators are prohibited from deducting typical business expenses, such as payroll and marketing, on federal tax returns.
So, in that respect, the senators’ proposal would not change the federal government’s ongoing policy stance regarding 280E, a provision that has wiped more than $1 billion from the balance sheet of marijuana companies nationwide.
Some tax experts expressed doubts the bill would advance, given the widespread popularity of marijuana reform, Law360 reported.
In January, the U.S. Drug Enforcement Administration’s the chief administrative law judge canceled the marijuana rescheduling process indefinitely amid accusations the agency is deliberately corrupting the hearing.
In August 2023, federal health regulators under former President Joe Biden recommended rescheduling marijuana.
Medical Disclaimer:
The information provided in these blog posts is intended for general informational and educational purposes only. It is not a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified healthcare provider with any questions you may have regarding a medical condition. The use of any information provided in these blog posts is solely at your own risk. The authors and the website do not recommend or endorse any specific products, treatments, or procedures mentioned. Reliance on any information in these blog posts is solely at your own discretion.
