The republican’s sneaky middle of the night tax plan that includes a mandate to repeal Obamacare also includes a high tax on legalized marijuana. The high tax is part of a 40-year-old federal provision that requires marijuana businesses to pay higher taxes than businesses in other industries. The weed tax, otherwise known as 280E, is a staute that was implemented as a way to halt drug cartels from buying expensive yachts other pricey items and writing them off.
Unfortunately, the taxes hurt legitimate businesses that are legally cultivating, processing or selling weed. The 280E tax rate means that marijuana businesses are paying a 70 percent
tax rate while other businesses are only paying 15 to 30 percent in taxes. Deductions that other industries are able to utilize as business expenses are prohibitedfor the legal cannabis industry. Removing marijuana from the Schedule 1 classification or amending the 280E could solve the dilemma.
Advocates haven’t been able to get House republicans to add an amendment to the 280E in the tax bill. However, Congressman Jared Polis (D-CO) filed an amendment to the 280E, saying that the proposal is “essentially revenue neutral.” The New Federalism Fund and the National Cannabis Industry Association are busy starting campaigns to lobby more support on Capitol Hill for 280E reform.
Grover Norquist, who is a republican anti-tax advocate, said that he has discussed the issue with the party’s leader Paul Ryan but hasn’t drummed up any support as of yet. If he can get enough bipartisan support, then reforming 280E could factor into whether they will support the overall tax plan. Norquist said about the tax package that “Marijuana could get into that package if some of the libertarian Republicans made that a condition of voting for the whole package.” For 280E reform to be successful, at least three House Democats and Republican Senators along with four Republican House members must support the reform.
credit:themaven.net
