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Despite attempts to ensure the drug would be a legal aspect of our society, the United States Tax Court issued a statement that the legal marijuana industry will still be collectively viewed as a drug smuggling operation. In a firestorm case, the Court determined that Harborside Health Center in Oakland, California (one of the best cannabis stores in the United States) will be forced to pay millions of tax dollars (from disallowed business deductions) between 2007 and 2012. While store officials have argued that the deductions were necessary to pay for rent, phone bills, security, and more, the Court has decided that, unless Congress declares otherwise, an unlicensed dispensary is no different than a crook selling pennies on a street corner. Let’s take a closer look at this bizarre situation and find out more information.

Expense Deductions Are a No-No!

Overall, businesses rely on cost deductions from tax liability for the purpose of paying rent, purchasing inventory, and establishing security (among other activities). Whether legal or illegal (in the case of the marijuana industry), the IRS still requires businesses to pay income taxes. So how did this cautious attitude come about?

Back in the 1980s, the IRS permitted a drug dealer (convicted) to use business deductions to pay rent and phone bills, a move that ultimately enraged the Reagan administration. Eventually, Congress approved a law that prevented these deductions for individuals who took part in drug trafficking. As a result, Section 280E was integrated into the existing tax codes.

Introducing New Laws in 2019

Interestingly, Section 280E diminished in the wake of the 2018 Congress, but officials have urged for its return sometime in 2019. In the ruling conducted yesterday, several members of Congress urged the IRS to issue guidance and proclaimed that medical marijuana stores should not have to be subject to the 280E code. However, the IRS reassured Congress that no action of this sort would be taken unless Congress edited the Controlled Substances Act or Code.

Always remember that marijuana does not have control over your life. You do. Are you suffering from a substance use disorder or a severe form of addiction? Do you have a friend or family member suffering from one or more of these debilitating illnesses? If you do, get in touch with Asana Recovery today. Our counselors and healthcare experts are ready to walk you through every step of the detox and withdrawal process and rehabilitation and guide you towards living a happier, healthier, and freer lifestyle. While the road to recovery might not be an easy road to travel, we promise to help you every step of the way. Take the first step to stay fit, healthy, and safe.

The time for you to take back control of your life is now. If you are interested in one of our residential treatment or supervised detoxification/withdrawal programs, we are ready and waiting to speak with you at your disclosure. Call Asana now at (949) 438-4504 to learn how to overcome your drug abuse or addiction troubles today.