It ain’t easy being green. That’s what owners of medicinal marijuana dispensaries are finding out, but probably not for the reasons you think. And it’s, like, a bummer man, a real bummer.
Let’s rewind to 1982. A convicted drug trafficker (who was obviously not a golfer) successfully claimed his yacht, weapons, and bribe money as a business expense, making them tax deductible, according to CNN.com. Enter tax code 280E, which closes this obvious loophole.
That tax code, however, while effective 30 years ago against dealers illegally selling banned substances, has inadvertently and adversely affected many legal businesses i.e. medicinal marijuana dispensaries. In the 18 states that have legalized medicinal marijuana, owners of dispensaries cannot claim standard business deductions, effectively raising their tax rate up to a mind blowing 75% in some cases. It’s like they peed on the dude’s rug, man.
280E Reform is currently working to overturn this statute, but so far has not had much success. In a letter to a congressmen in 2011, the IRS claims it’s merely enforcing the law, and that the onus lies with Congress to update the tax code.
But while the Obama administration and Congress largely ignores the issue, medicinal marijuana dispensaries are getting hammered, and not in a good way.
– Carlos Delgado, CBS Radio