Two bills winding their way through Congress could help pot sellers launch their small businesses in the U.S.
First, Rep. Earl Blumenauer, D-Ore., introduced the Small Business Tax Equity Act on Wednesday, which would change section 280E and allow medical marijuana dispensaries to take standard business deductions on their taxes. Another bill would help these dispensaries open bank accounts with more ease.
Similar bills have come and gone before, but lawmakers are hopeful our changing attitude toward pot--more than 52 percent of Americans support legalizing the drug--could push more legislation through Congress.
"There is an opportunity with lots of moving pieces in Congress," Blumenauer told U.S. News & World Report, noting these reforms could be tacked onto larger bills like tax reform and the farm bill. "These are relatively minor technical adjustments and in times past, things like this would find their way to be part of larger pieces of legislation."
Since 2011, the IRS has audited companies citing section 280E, which was meant for drug kingpins and companies who trafficked in “controlled substances.” But Henry Wykowski, a defense lawyer in California, told The Huffington Post, "The IRS is using this law in a way it was never intended to be used." In fact, a 2010 memo sent to members of Congress explains "neither section 280E nor the Controlled Substances Act make an exception for medically necessary marijuana."
Since only filing taxpayers can be hit with the section 280E penalty, "the result is, unfortunately, you're better off not filing," Wykowski said. It's what kept the market from retaining any sense of legitimacy and most sellers from wanting to enter.
Do you think pot sellers should have a stake in the small business landscape?