Tax burden for pot business owners could negate profits


Dispensary owners engaging in recreational sales worry how much they’ll be able to actually take home.

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BY JACOB PALMER | DIGITAL NEWS EDITOR

Dispensary owners engaging in recreational sales worry how much they’ll be able to actually take home.

Due to the federal tax code banning marijuana sellers from claiming deductions, Oregon entrepreneurs are finding themselves in a state of uncertainty.

The federal tax code that penalizes weed businesses is a clause called Section 280E, which prohibits any business “trafficking” in Schedule 1 narcotics from taking standard deductions. As The Washington Post reported last year,Congress amended the tax code in 1982, at the height of the Reagan-era war on drugs, to prevent drug traffickers from writing off their couriers’ salaries as a business expense.

Industry analysts told The Post that numerous pot businesses have folded under the tax burden. Sources tell WW that many Portland dispensaries are using venture capital to stay afloat until Congress changes the federal tax laws.

(SOURCE: Willamette Week)

 


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