Tax
Mar. 6, 2020
Section 280E of the Internal Revenue Code revisited
In basic terms, Section 280E denies a marijuana business the ability to deduct its business expenses in computing its federal income tax liability.
Stanley S. Jutkowitz
Partner
Seyfarth Shaw LLP
Stanley concentrates his practice on domestic and international business transactions, tax planning, and counseling on corporate, real estate and cannabis transactions. As the leader of the firm's cannabis law practice and founding editor of the firm's marijuana law blog, The Blunt Truth (www.blunttruthlaw.com), he stays current with the evolving law and counsels clients in navigating the uncertain legal landscape, guiding them through challenges to enable them to conduct business with the least amount of disruption.
Marijuana-related businesses should already know about Section 280E of the Internal Revenue Code. In basic terms, Section 280E denies a marijuana business the ability to deduct its business expenses in computing its federal income tax liability. It was enacted into law in 1982 to reverse the holding of the U.S. Tax Court in Jeffrey Edmondson v. Commissioner, T.C. Memo 1981-623, in which the Tax Court allowed a drug dealer to deduct certain ...
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