As The IRS Goes After Medical Pot Dispensaries, Activists Fights Back
The IRS is using outdated, unfair tax policies to spring financial problems on legal, medical marijuana business operators. If the IRS campaign to run medical pot businesses dry continues, it could shut down enough dispensaries to turn back the clock on medical pot legislation. To fight back, medical marijuana business operators and their advocates have joined forces to announce the 280E Reform Campaign.
THe 280E Reform Campaign explains the group's necessity:
All businesses, even nonprofit dispensaries, pay taxes to the IRS each year. But there’s a disconnect between federal and state laws called IRS Code Section 280E. Designed to fight drug trafficking, the sweeping rule was put in place during the Reagan Administration, long before medical cannabis laws were passed in 16 states and the District of Columbia.
Legitimate medical cannabis businesses want and expect to pay their fair share of taxes. In addition to federal taxes, dispensaries also pay state and/or local taxes. However, the IRS is now using 280E to stop medical cannabis businesses from making standard business deductions, which leaves them with a crushing tax bill they cannot afford. In a growing number of audits, the IRS is leaving dispensaries no recourse but to shut down – or to move to the underground economy
According to Campaign spokesperson Steve DeAngelo, the consequences of the IRS's campaign to shut down dispensaries could be dire. He said in a press release:
“Should the IRS campaign be successful; it will throw millions of patients back in to the hands of street dealers; eliminate tens of thousands of well paying jobs, destroy hundreds of millions of dollars of tax revenue; enrich the criminal underground; and endanger the safety of communities in the 17 medical cannabis states.”
To combat said dangers, the 280E Reform project is announcing a national campaign to "bring awareness to legislators, provide legal and tax counsel for threatened organizations and prepare a grassroots educational effort to enlighten the public on the need to reform 280E."
Tax attorney Henry Wykowski said in a press release:
“We are going to challenge this tax code to make sure that patients all over America have the ability to safely fill their health care needs with safe access from medical cannabis providers’ who are operating clearly with state laws. This is a public safety issue and a health care right.”
The coalition includes prominent leaders in the movement to reform marijuana laws, including Don Duncan, co-founder of American for Safe Access(ASA), and Troy Dayton, former Senior Development Officer of the Marijuana Policy Project (MPP), among many others.
Read more about it here.