Did You Know You Can’t Claim Cannabis Business Expenses?
Tax code Sec. 280e places crippling restrictions on cannabis businesses. Here’s how some are trying to save money on their taxes this year.
Did you know that you can’t claim cannabis business expenses? Taxes for cannabis industry businesses are a nightmare. Tax Code Sec. 280e prevents any sort of business write-offs for those dealing with illicit substances. Unfortunately, according to the Controlled Substances Act of 1970, cannabis is still considered a dangerous, illegal drug. Here’s what you need to know about 280e and how to find help.
Cannabis businesses can’t claim expenses
Tax code 280e places restrictions on the cannabis industry that are not faced by other businesses. The federal government prohibits cannabis businesses from claiming basic expenses like rent, supplies, or salaries on their taxes.
This forces businesses into a 40 to 90% tax rate. By comparison, the corporate tax rate is 35%. Though, some suggest that some large corporations pay a tax rate as low as 12.5%.
280e was enacted prior to any sort of major medical or recreational cannabis reform, in an effort to crack down on drug dealers. In fact, the law was enacted after a drug dealer successfully claimed travel costs on as business expenses.
Now, however, the difference between being a legitimate business and a drug dealer is whether or not you pay your taxes, and whether or not they’re done right.
How to find 280e tax help
280e provides most cannabis business owners some headaches and even lands some of them in jail. Thanks to 280e, the difference between being a legitimate business and a drug dealer is whether or not you pay your taxes, and whether or not they’re done right.
Reducing the burden of 280e is not simple. Many hoping to reduce their total income allocate indirect costs to inventory. Upon sale, many also try allotting indirect costs to deductible costs of sales.
Sound complicated? Don’t worry, help is at hand. Tax Defense Partners wants to help businesses stay in the legal safe zone and avoid crippling costs. These trusted tax professionals handle everything, including tax resolution, tax returns, levi and lein release, and wage garnishment.
This means that you can relax and let the tax professionals do the work.
Tax Defense Partners, here to help
Finding help with 280e is as simple as scheduling a free consultation. To make things easy, Tax Defense Partners has online booking. Peruse the calendar and request an appointment on their website, CannabisTaxRelief.com.
They are also available to everyone, including medical cannabis patients, recreational consumers, extractors, and manufacturers.
When it comes to cannabis taxes, 280e is far from fun and games. Reaching out for a little help can save money and keep you out of a tricky legal situation. Why take the risk?