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Did you know that Section 280E of the Internal Revenue Code forbids businesses from deducting ordinary business expenses from gross income associated with the sale of Schedule I or II substances, as defined by the Controlled Substances Act?
Weedia®Buzz recently sat down with our CEO, John Lord, to discuss this hot topic in the marijuana industry. John told Weedia®Buzz “This inequity is a huge burden on our industry and must be addressed if our business is going to succeed. Not fixing this problem challenges the very ingenuity and creativeness American commerce is built on.”
Section 280E states: No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted. Click here for more.
While cannabis companies are forced to file taxes under §280E rules, they are also bound to comply with additional federal employment regulations. LivWell, for example, is required to pay payroll taxes, and provide health coverage for employees as required by the Affordable Care Act, yet, they are unable to deduct ordinary costs and other expenses related to their employees. LivWell employs 550 people.
Continue reading here: http://weediabuzz.com/irs-code-280e-forces-cannabis-retailers-pay-excessive-taxes/