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To tax or not to tax? The marijuana problem

Submitted by Marijuana News on Mon, 05/11/2015 - 19:26

Dissonance between state law and federal law in the United States is leading to exorbitant tax bills for marijuana retailers.

While a legal activity in certain states, the sale of marijuana is still considered illegal under federal law.

States like Colorado that legalised the sale of marijuana have reported substantial tax revenue. Currently 23 states and one district have legalised marijuana for medical or recreational use, allowing anyone over the age of 21 to purchase retail marijuana from licensed shops.

However US federal law, including the federal tax system, remains at odds with permissive state laws. The incongruity is resulting in crippling tax bills for fledgling marijuana dispensaries.

The crux of the tax issue is a 1982 law which prevents drug dealers from claiming tax deductions for expenses incurred in the illegal trafficking in drugs.  With no tax deduction for business expenses drug retailers are taxed on their gross business...

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URL: 
http://www.stuff.co.nz/business/opinion-analysis/68476264/to-tax-or-not-to-tax-the-marijuana-problem

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