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Internal Revenue Code (IRC) Tax Deductions Marijuana Related Businesses

Seyfarth Shaw LLP

The Week in Weed: February 2025 # 2

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Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana. This week, we look at a new proposal that would prevent cannabis companies from deducting business expenses, even if...more

Bradley Arant Boult Cummings LLP

Not Cool, Man: Senate Proposal to Expand 280E Taxes on Cannabis Businesses Even if Rescheduled

Anyone who thought that the momentum towards federal liberalization of marijuana would be a straight line found themselves with a cold dash of water to the face. Late last week Republican senators filed a bill, entitled the...more

McGlinchey Stafford

Podcast: Denial of Tax Deductions for Marijuana Businesses - Who is this Inter-Loper to Section 280E [More with McGlinchey, Ep....

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Has the Supreme Court’s opinion overturning the Chevron doctrine altered the landscape for the denial of tax deductions for marijuana businesses under Section 280E of the Internal Revenue Code? Here to explore that question...more

McGlinchey Stafford

Paid or Incurred: Marijuana Rescheduling, Taxes, and Section 280E

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The cannabis industry knows well the economic burden imposed by Section 280E of the Internal Revenue Code of 1986 (Code). It substantially increases the cost of doing business because it disallows deductions for expenses...more

Bradley Arant Boult Cummings LLP

Blazing Trails: Exploring ESOPs in the Cannabis Industry

The budding cannabis industry, despite its rapid growth and gradual acceptance in recent years, still faces a major sustainability challenge: Cannabis businesses cannot deduct most ordinary business expenses. Under Internal...more

Rivkin Radler LLP

In NYC, Cannabis Business Expenses Now Deductible

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New York Governor Kathy Hochul signed a bill on Friday, November 20, 2023, that allows New York City cannabis businesses to deduct business expenses paid or incurred in carrying on such business for purposes of determining...more

Bricker Graydon LLP

The Possible Demise of 280E in the World of Cannabis

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The Internal Revenue Code, 26 U.S. Code §280E, is the bane of any business associated with the “trafficking” of Schedule I or Schedule II controlled substances....more

Husch Blackwell LLP

Decoupling of Section 280E from State Tax Codes

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On May 18, 2022, in a 153-2 vote, the Massachusetts House of Representatives voted to amend the state’s tax code to provide income tax relief for Massachusetts cannabis businesses. ...more

Foley Hoag LLP

Massachusetts May “Decouple” From Section 280E

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Section 280E of the Internal Revenue Code provides that no deduction or credit shall be allowed for any amount paid or incurred in carrying on any trade or business if such trade or business consists of trafficking in...more

Freeman Law

Section 280E and The Taxation of Cannabis Businesses

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Section 280E of the Internal Revenue Code prohibits taxpayers who are engaged in the business of trafficking certain controlled substances (including, most notably, marijuana) from deducting typical business expenses...more

Holland & Knight LLP

IRS Continues to Audit and Litigate Against Cannabis Businesses

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As Congress continues to deliberate the federal legalization of marijuana, the cannabis industry continues to face scrutiny from the IRS under Section 280E of the Internal Revenue Code (Code). Enacted in 1982 in response to a...more

Oberheiden P.C.

Eleven of the IRS's Enforcement Priorities During the 2021 Tax Season

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It is tax season once again. While the Internal Revenue Service (IRS) has extended this year’s filing deadline to May 17, 2021 for individuals, businesses must still file by April 15, and all U.S. taxpayers must ensure that...more

Bailey & Glasser, LLP

The IRS Signals It Will Continue to Challenge Cannabis-Dispensary Business Deductions Under the Biden Administration

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The IRS recently indicated that it does not plan to reevaluate its position which precludes cannabis dispensaries from taking deductions for business costs and expenses under Section 280E of the Internal Revenue Code. The...more

Partridge Snow & Hahn LLP

Tax Court Confirms That Cannabis Businesses Cannot Take Advantage of Certain Tax Breaks Other Businesses Use

One of the most frustrating issues facing the US’s burgeoning cannabis industry has been the inequitable tax treatment that cannabis businesses face as compared to other industries. The IRS’s guidance for one section of the...more

Partridge Snow & Hahn LLP

Internal Revenue Service Clarifies Tax Rule for Marijuana Industry

The Internal Revenue Service (IRS) issued guidance on Thursday, September 10, 2020, to marijuana businesses. The new guidance does not change existing IRS rules, but briefly explains the rules for reporting income, paying...more

Burr & Forman

Cannabis Business Takes Position That § 280E Is Unconstitutional – And It’s Like a Grocery Store For Adults

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Cannabis (or marijuana) dispensaries have long stated that they are subjected to harsher tax consequences under the Internal Revenue Code (“IRC” or “Code”) than their “legal” counterparts. Specifically, they have argued, in...more

Seyfarth Shaw LLP

Section 280E – Why Are We Still Having This Discussion?

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If you are in the cannabis industry, you should already know Section 280E of the Internal Revenue Code. It consists of only one sentence...more

Lowndes

Tax Court Upholds Constitutionality of Rule Prohibiting Deductions for Marijuana Businesses

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I recently wrote about the Tax Court decision in Northern California Small Business Assistants Inc. v. Commissioner, which addressed whether Section 280E’s denial of tax deductions to marijuana businesses violates the Eighth...more

Rosenberg Martin Greenberg LLP

Are Owners of Cannabusinesses Eligible for the Qualified Business Income Deduction Under Section 199A?

Section 199A of the Internal Revenue Code, introduced by the Tax Cuts and Jobs Act (“TCJA”), created an opportunity for business owners to substantially lower their income taxes. Subject to many qualifications, beginning in...more

Rosenberg Martin Greenberg LLP

Loughman Case Illustrates Potential Impact of Entity Choice on Income Tax Liability for Cannabusinesses

Recognition of Internal Revenue Code (“I.R.C.”) § 280E and its potential to limit deductions can have a material impact on the ongoing operation of a cannabusiness. While operational concerns require attention, improper tax...more

Rosenberg Martin Greenberg LLP

Section 280E Remains a Problem for Maryland Cannabusinesses: How to Minimize Taxable Income through Proper Classification of...

The Maryland Medical Cannabis Commission (“the MMCC”) recently reported to the Maryland legislature on “the deleterious effects of the federal tax code on medical cannabis businesses.” As stated in its report, I.R.C. § 280E...more

Foster Garvey PC

A Real Bummer for The Marijuana Industry

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As a general rule, in accordance with IRC § 162(a), taxpayers are allowed to deduct, for federal income tax purposes, all of the ordinary and necessary expenses they paid or incurred during the taxable year in carrying on a...more

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