$10B Industry Stuck: IRS Refuses to Allow Federal Tax Deductions for Marijuana Businesses – Must Know!

IRS Maintains Marijuana Business Tax Deduction Restrictions Despite Potential Rescheduling Efforts

According to the article of Benzinga, the IRS has stated that marijuana businesses cannot claim tax deductions under current rules because marijuana is still considered a Schedule I controlled substance. Despite President Biden‘s recent moves to potentially reschedule marijuana, which could reduce taxes, no final decisions have been made yet. This follows Section 280E of the tax code, which denies deductions for expenses related to businesses dealing with Schedule I or II substances, including marijuana, even in states where it’s legal.

This announcement has led to reactions from the marijuana industry, with companies like Trulieve Cannabis Corp and TerrAscend Corp seeking refunds for taxes paid under Section 280E. They argue that these tax rules create financial challenges. The IRS is reviewing these refund requests but emphasizes that any changes to tax laws must wait for clear decisions from Congress or federal agencies. This ongoing debate in Congress includes proposals, like one from Representative Earl Blumenauer, to change IRS rules so marijuana businesses can get the same tax benefits as other legal industries.

READ ALSO: Impact Of Biden’s Student Loan Payment Pause On Loan Forgiveness Programs And Borrowers

$10B Industry Stuck: IRS Refuses to Allow Federal Tax Deductions for Marijuana Businesses – Must Know! (PHOTO: Cannabis.net)

Waiting for Clarity – Marijuana Industry and Lawmakers Anticipate Federal Tax Policy Shifts

Furthermore, as discussions continue, marijuana businesses and lawmakers are waiting for more guidance and potential changes in federal policies that could affect how these businesses are taxed across the country.

READ ALSO: Philly Joy Bank Initiative: $18K Support For Expecting Mothers In Philadelphia Neighborhoods