Tax Reform and 280E Repeal... So You're Telling Me There's a Chance?
The Republican tax reform bill currently being debated in the U.S. Senate may end up including a repeal of 280E for state-licensed marijuana companies if a last-minute bipartisan amendment makes it into the legislation.
The amendment – offered by Republican U.S. Sen. Cory Gardner of Colorado – would essentially exempt cannabis companies from 280E as long as they’re in full compliance with state laws.
The bill has garnered 33 co-sponsors since its introduction earlier this year – including Curbelo and 11 other Republicans – which illustrates how far into mainstream politics cannabis reform has moved.However, there’s been talk among cannabis advocates in Washington DC that Curbelo’s bill could be wrapped into a larger tax reform package by Republican leadership in Congress, giving the proposal a better chance of becoming law.
The 280E provision of the federal tax code has long been the financial bane of marijuana companies that have been trying to play by the rules while also turning a profit.
The provision prevents MJ companies from taking standard federal tax deductions that are allowed for every other legal industry, so cannabis businesses typically end up paying a 70%-90% federal tax rate.
A number of pro-marijuana industry groups were hard at work Thursday lobbying senators to support the amendment, as the upper chamber went into what will likely be the final days of debate on the tax bill before a final vote.
“To help this amendment succeed, senators need to hear from you!” the National Cannabis Industry Association (NCIA) wrote in an email blast to its members.
Neal Levine, chairman of the marijuana industry organization the New Federalism Fund – which has been working almost exclusively on a 280E repeal for the MJ industry – said the amendment “has a real chance to pass,” in large part because of bipartisan support from members of Congress.
By contrast, NCIA’s director of government relations, Michael Correia, said he was “hopeful” about the amendment’s chance and said it would be a heavy lift politically to get enough votes and added:
“It’ll be a challenge to see if we can get 51 senators to support this”
Americans for Tax Reform, headed by the conservative anti-tax crusader Grover Norquist, is also throwing its support behind Gardner’s amendment and is lobbying senators to back the measure, sources told Marijuana Business Daily.
Source: MJ Business Daily
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