No Tax Breaks for Cannabis Companies

By
HeadQuest

The U.S. Tax Court again ruled that Section 280E of the Internal Revenue Service (IRS) tax code is constitutional and cannabis companies aren’t entitled to common business deductions. Many cannabis companies that are legal under state law are facing effective tax rates as high as 70% because the federal government considers them to be trafficking in a Schedule I substance. If you want any kind of a tax break, move to California — a new measure there allows state deductions, starting next year, for cannabis companies that file their taxes as sole proprietors or partnerships.

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