7 US House Republicans File Bill To Prevent 280E Tax Relief For Cannabis Businesses

Forcing state-licensed cannabis businesses to continue paying punitive taxes on their ordinary business expenses, even should cannabis be federally rescheduled, is now a bicameral effort in the U.S. Congress.

Congressman Jodey Arrington, R-Texas, who chairs the House Budget Committee, and six of his fellow representatives in the U.S. House introduced legislation, H.R. 1447, on Feb. 21. The bill aims to amend the Internal Revenue Code (IRC) of 1986 to maintain the prohibition on any deduction or credit associated with a trade or businesses involved in “trafficking” cannabis.

Under Section 280E of the IRC, businesses involved in Schedule I or II drugs under the Controlled Substances Act are unable to deduct their ordinary business expenses—such as payroll, rent and utilities—from their taxable incomes.

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