Cannabis companies could face higher taxes via Biden spending plan and state rules

According to a 20 April report at MJ Biz…

Marijuana businesses have paid higher taxes than mainstream companies for years thanks to Section 280E of the Internal Revenue Code, and now cannabis operators – especially retailers – might face an even bigger tax bill from Uncle Sam as well as some states.

Two noteworthy developments could boost marijuana firm taxes:

  • President Joe Biden’s $2 billion infrastructure plan proposes raising the federal corporate tax rate from 21% to 28%.
  • States legalizing recreational marijuana programs increasingly are limiting vertical integration to small operators, or microbusinesses. By contrast, stand-alone marijuana retailers face a higher federal tax burden than vertical operations given the limited number of deductions retailers can take, tax experts say.

The prospect of such a one-two punch has raised alarm bells among cannabis tax experts….

Read more 

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