Senator James Lankford (R-OK) this week introduced legislation to prevent marijuana businesses from deducting business expenses from their taxes. Lankford was joined on the bill by Senator Pete Ricketts (R-NE).
"Marijuana doesn't make our families stronger, our streets safer, or our workplaces more productive. Businesses who sell federally illegal drugs—including marijuana businesses—shouldn't get federal tax breaks. This bill clarifies federal tax law to make sure a federally illegal product does not have a federally legal tax deduction," said Lankford.
"We thank Senator Lankford for his strong leadership in both fiscal responsibility and drug policy. The federal government should not be in the business of giving tax relief to the federally illegal, addiction-for-profit marijuana industry. This legislation would prevent deficit increases while ensuring that taxpayers don't foot the bill for the revenue gap made by tax write-offs for people who choose to violate federal law and poison our kids," said Dr. Kevin Sabet, President and CEO of Smart Approaches to Marijuana (SAM).
Since the Tax Equity and Fiscal Responsibility Act of 1982, tax law has prevented businesses trafficking Schedule I or II drugs from deducting business expenses. However, if the Biden Administration's push to reschedule marijuana is successful, marijuana businesses would be able to take business deductions. This bill preempts that loophole and ensures that marijuana businesses would not be able to deduct business expenses from their taxes.
Source: James Lankford