2 June 2016
MJ Biz write
“If the (Tax Court) rules that 280E doesn’t apply to state-sanctioned dispensaries, it would remove that as an issue in all IRS audits, so the IRS couldn’t legitimately raise it with a straight face again,” Wykowski said. “It would basically take 280E off the books.”
And that would be a “massive” win for the industry at large, said William Simpson, the founder and president of Chalice Farms in Oregon, which owns four dispensaries and produces its own edibles and extracts.
“It’d make us profitable. With 280E in effect, we are literally in the red,” said Simpson.
Chalice has already set aside $1.7 million for next year’s federal tax bill because of 280E, Simpson said.
“That would be the profit that we would have,” he said.
Section 280E stems from a 1981 U.S. Tax Court case which allowed a convicted drug trafficker to deduct ordinary business expenses arising from the sale of amphetamines, cocaine and marijuana. Congress reacted by creating 280E to block other drug dealers from doing the same.
Read the full report at : http://mjbizdaily.com/possible-landmark-mj-industry-tax-trial-starts-monday/
Henry Wykowski Law Firm
US Tax Court
Information Page: 26 U.S. Code § 280E – Expenditures in connection with the illegal sale of drugs
National Cannabis Industry Association White Paper on 280E pdf