Law 360 Article: 5 Things Cannabis Biz Attorneys Should Know About Tax Law

Karla J. Brannen, CPA, Albin, Randall & Bennett, Portland, Maine write, “For decades, cannabis, derivatives of cannabis, and related substances such as hemp and marijuana were classified as Schedule I narcotics under the 1970 Controlled Substances Act. Federally, the production and sale of marijuana have been and remain illegal, although a marijuana business remains obligated to pay federal income tax on its taxable income under Sec. 61(a).”

The Denver Afterschool Alliance receives $1.5 million a year from the city’s collected marijuana tax revenue,

The Signal Tribune reports, “Tom Modica, acting city manager, stated in a memo to the council dated for Dec. 3 that cannabis tax-rates can range from 0% to 12% by law, as approved by Long Beach voters, and currently range from 6% to 8%.”

“A cannabis company has appealed its case against the IRS at the Ninth Circuit in an effort to soften the blow of a policy that can push state-legal marijuana businesses’ tax rates to upwards of 70%.”

Those of you beginning to pick up regulated cannabis clients might find this article a useful and interesting read.

The most difficult regulatory aspect to deal with is the topic of taxation, primarily where non-First Nations people are buying cannabis products on-reserve without paying taxes back to the province. What has been learned from tobacco sales is that vendors on-reserve will not comply with provincial taxation rules and remit to the province. Provinces that intend to pursue the same approach with cannabis as they took with tobacco are not likely to get far into the conversation with First Nations.

Companies say tax burden is too high and they may just pay off back taxes and call it a day.

Newly proposed legislation would nearly triple the provincial sales tax (PST) on those products to 20%. Write MJ Biz

A California legislator wants the state to explain its recent decision to increase business taxes on the state’s struggling legal marijuana industry. Reports USA News.

Tax revenue from Nevada’s marijuana industry beat expectations and generated more than $31 million between July and October, with a majority coming from Clark County, according to the Nevada Department of Taxation. Reports Stock Daily Dish