That Business Owners Need To Know About At Tax Time. The state-legal marijuana industry has seen some important changes in 2015.
Even though the federal laws remain unchanged at tax time dispensary owners, growers, medible makers and everyone else in the places with a state-legal medical marijuana industry should be aware of these changes at tax time.
By law anyone who brings in $1 worth of business income must file a tax return with the IRS. That is when they get to subtract their business deductions. Marijuana business people are no exception. If your state has repealed medical prohibition, it is the politician’s job to get unfair federal laws changed for their residents and businesses.
A change in those federal laws would save American taxpayers more than $13 billion every year. Time has proven marijuana is not a gateway drug, nor does it cause madness as movie producers once said it did to thrill their viewers. And if smoking a medicine is the problem, medical users where dispensaries are available have realized they can also vaporize, eat medibles, drink juice or other beverages, use tinctures, pills or sprays. Public consumption is down where medical marijuana clubs are available.
Every other small or large business is allowed deductions when they do their IRS federal return. Within the states where marijuana is legal for medical purposes there are businesses that deserve to be treated fairly. There are 23 states and the District of Columbia that now allow medical marijuana; those states collect taxes (or plan on collecting taxes) and put control in place for the prescription holder.
Before America’s state-legal marijuana businessmen and women can compete fairly those federal laws must be repealed. A new federal ruling made in a San Francisco federal court blocks the DEA from prosecuting medical marijuana dispensaries if they are state-sanctioned. The Rohrabacher-Farr Amendment bars the Department of Justice (DOJ) from using federal funds to block state marijuana laws. This 1603-page federal spending report essentially brings an end to the use of the taxpayer’s money to block marijuana’s medical use.
Where medical marijuana is available legally, sustainable healthcare is up and overdoses on prescription pills is down. Marijuana has been claimed to be a super antibiotic, good for strokes and other brain problems, helpful to alleviate pain, nausea, Parkinson, inflammatory bowel disease, PTSD, epilepsy and other seizures, kill cancer and Forbes magazine even asked if your aging parent should try it.
Dr. Sanjay Gupta has said we should legalize medical marijuana now. This a plant that was once listed in the U.S. Pharmacopeia and readily available in drug stores. With its use people have walked out of hospices and hospitals to live fuller lives. The U.S federal government has even owned patent #6630507 since 2003 for its use as an antioxidant and neuroprotectant.
The DOJ issued a memo that allows Indian tribes to grow and sell marijuana on their land. Other countries and people are also rushing to end its medical prohibition; for example Israel uses marijuana in their hospitals and for research. Many senators and governors want it legalized for medical use once again.
The IRS Advisory Code Report says marijuana businesses are now legal in some states, but still illegal under federal law. Marijuana businesses are not allowed to deduct all of their expenses because the federal government says no deduction or credit shall be allowed for any amount paid or incurred if such trade or business (or the activities of the trade or business) consists of trafficking in a controlled substance. Marijuana according to federal laws is a controlled substance with no medical use; yet the federal government holds a patent for medical use.
Those who want to keep medical marijuana illegal are mostly getting rich off of it being an illegal substance, although many pay no taxes on the money they earn. This includes the corrupt, illegal growers, dealers, trimmers and medible makers, people receiving taxpayer assistance checks but working in this trade, and those who want to keep marijuana on the black market. They don’t care what the citizens want, how they voted, or whether or not it helps a person’s medical condition, as long as they make money.
Medical marijuana users and business owners in the states where the citizens have voted to make marijuana’s use legal once again need to have regular meetings with their state politicians to discuss the unfair taxation problems. The people have spoken, now it’s the politician’s turn to get those laws changed.