US Tax Court guidelines marijuana deductions are not permitted

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The U.S. Tax Court once again ruled that section 280E of the Internal Income Code is constitutional and cannabis firms are not entitled to typical business enterprise deductions.

The ruling centered on a plea from Northern California Smaller Company Assistants, which received a tax bill and penalty from the IRS for $1.five million for the 2012 tax year, Bloomberg reported.

The Tax Court concluded that marijuana remains a Schedule 1 controlled substance and consequently, below present federal law, the IRS is right in disallowing common tax breaks for cannabis firms.

The ruling comes on the heels of several MJ market losses in Tax Court final December, and a warning from a former IRS lawyer that extra 280E audits and associated actions are most likely on the way for MJ firms.

Regardless of the ideal efforts of some of the top rated legal minds in the marijuana market, 280E remains in impact and most likely will till Congress acts to modify the law.

Nonetheless, some California cannabis firms can create off deductions at the state level below a bill signed earlier this month by the state’s Democratic governor, Gavin Newsom.

For extra on the current ruling, click right here.

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