Congressional Republicans (with the Obama administration’s bipartisan support) are all for using the IRS to target and decimate one sector of the U.S. economy — medical marijuana providers. Alternet reports:
… Read the rest
The IRS employs Section 280E, a 1982 tax code addition that was a response to a drug dealer’s successful effort to claim his yacht, weapons, and even bribes as business expenses. Under 280E, individuals involved in the illicit sale of controlled substances — including marijuana, even medical marijuana in states where it is legal — cannot claim standard business expenses on their taxes.
“The Obama administration is using Section 280E to push these local and state licensed medical marijuana dispensaries out of business,” said Kris Hermes, spokesman for the medical marijuana defense group Americans for Safe Access.
Most small businesses pay an effective tax rate of between 13% and 27% on net income, according to the Small Business Administration. With the unintended application of 280E, state-legal marijuana providers pay an average effective tax rate of 65-80%.