Tags: Marijuana Legalization | marijuana | pot | taxes | write-offs

Pot Businesses Feeling Pinch on Tax Day With No Write-offs

By    |   Wednesday, 15 Apr 2015 02:36 PM

Tax day in America is a sore subject for businesses in the marijuana industry, as federal laws prohibit them from writing off expenses that other businesses can — resulting in "a great deal of anxiety."

According to a McClatchy report, marijuana growers and sellers operating in states where those practices are legal are not able to deduct any expenses on their tax returns. That means more money owed to Uncle Sam.

The reason, according to the report, is that growing and selling marijuana is a federal felony. Currently, four states allow both medical and recreational marijuana to be sold and used: Alaska, Colorado, Oregon, and Washington. Several others allow marijuana use in some form.

"We don't want special favors — we just want to be treated like businesspeople," Nick Cihlar, who co-owns a company that grows marijuana in Washington, told McClatchy.

It would be difficult to change the federal law that prevents these businesses from deducting expenses. If nothing else, even attempting to do so would result in severe backlash.

"Like any special-interest group, they're after one thing: more money," legalization foe Kevin Sabet told McClatchy. "It's particularly audacious to demand that the government allow you to deduct expenses when you're breaking federal law."

Washington Association for Substance Abuse and Violence Prevention President Derek Franklin told McClatchy that handing marijuana businesses a tax break would drive prices down at the consumer level, which would make it easier to get.

Giving these businesses tax breaks "doesn't make sense from a public health perspective," Franklin said.

One legal marijuana dealer told McClatchy that high tax rates make it hard for him to make money — not to mention compete with dealers on the street.

"If someone spends $100 in our store, $77 of it is going to some form of tax — that's federal, state, sales, whatever," pot shop owner Tim Thompson told McClatchy. "There's a lot of people staying out of the recreational market because the black market is cheaper, and the reason is because of these taxes and lack of write-offs."

Steve DeAngelo, owner of a medical marijuana dispensary in California, told McClatchy, "Most Americans feel a little bit of anxiety going up to April 15 — we feel a great deal of anxiety."

Two Oregon Democrats, Sen. Ron Wyden and Rep. Earl Blumenauer, are pushing for Congress to pass the Small Business Tax Equity Act, which would "exempt a trade or business that conducts marijuana sales in compliance with state law from the prohibition against allowing business-related tax credits or deductions for expenditures in connection with trafficking in controlled substances."

A national poll, meanwhile, shows that legalizing marijuana is favored by 53 percent of Americans.

The prospect of legalizing the drug has turned some marijuana growers across the country into lobbyists.

© 2017 Newsmax. All rights reserved.

   
1Like our page
2Share
US
Tax day in America is a sore subject for businesses in the marijuana industry, as federal laws prohibit them from writing off expenses that other businesses can - resulting in a great deal of anxiety.
marijuana, pot, taxes, write-offs
457
2015-36-15
Wednesday, 15 Apr 2015 02:36 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved