The historic Boston Tea Party slogan “no taxes without representation” was given a new meaning Wednesday, when a major cannabis company marked the 250th Anniversary of the civil disobedience act by protesting the federal code which prohibits the cannabis sector from taking key tax deductions as other traditional businesses.
Executives and employees from the multi-state cannabis company MariMed dressed in colonial clothing took to Boston Harbor to draw attention to Internal Revenue Service code 280E. The stunt was meant to be a parody of a December 1773 protest in Boston by the colonial-era Bostonians against the British monarchy’s raising tax on tea. They poured cases into the ocean.
The company highlights another part of federal legislation that makes cannabis businesses subject to higher tax rates.
In a press statement, MariMed’s CEO and President Jon Levine stated that “our protest was not about us but more so to give a voice to the entire industry.” “Sections 280E are unfair and hinder companies that strive to make cannabis available for medical cannabis patients and consumers in all states. It should be repealed. This would help us achieve our goal of improving people’s lives through cannabis.
The marijuana industry is still subject to higher taxes under 280E. This is despite the fact that several states, including Connecticut Illinois, and New Jersey have taken steps to offer state-level relief for their cannabis markets, in recognition of unique financial challenges.
In April, Rep. Earl Blumenauer, (D-OR), reintroduced , a bill that would amend IRS code in order to allow marijuana businesses that are legal in their state to take advantage of federal tax deductions available to other companies.
He told Marijuana Moment previously that he is “absolutely certain that when we can fully deduct the business expenses of people that actually there will be more revenue collected , because they will comply with the law.”
The Congressional Research Service (CRS), noted , in a report from 2021 that IRS “has provided little tax guidance regarding the application of Section 280E.”
In a 2020 update, the IRS provided some guidance. It explained that, while cannabis businesses cannot take standard deductions for their gross receipts, 280E doesn’t “prohibit (a) a participant in marijuana industry to reduce its gross revenue by its correctly calculated cost of goods purchased in order to determine its gross profit.”
The IRS update appeared to be in response to a Treasury Department Internal Watchdog Report released in 2020. IRS was criticized by the department’s inspector for tax administration for not adequately advising taxpayers in marijuana businesses about federal tax laws. It also directed the agency “to develop and publicize specific guidance for the marijuana industry.”
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Photo by MariMed and Angela Rowlings.
The article Marijuana company stages Boston Tea Party-style protest over federal tax code 280E that troubles industry first appeared on Marijuana Moment.
