WASHINGTON, D.C. – Sen. Michael Bennet, D-Colo., announced today he is co-sponsoring the Small Business Tax Equity Act, which would enable marijuana businesses operating in compliance with state law to take ordinary business tax deductions.
Under the current federal tax code, businesses that sell Schedule I or Schedule II substances – as defined by the Controlled Substances Act – are prohibited from receiving tax deductions from the expenses associated with the sale of the illicit substance. Marijuana is classified as a Schedule I substance.
“With more states joining Colorado to legalize medical and recreational marijuana, we need a tax code that doesn’t unfairly penalize these small businesses that are trying to operate within the law,” Bennet said in a statement. “This bill would make important updates to our tax code to allow legal marijuana businesses to take the same tax deductions as other small businesses.”
Sen. Ron Wyden, D-Ore., introduced the bill in the Senate last week. It was then referred to the Committee on Finance.
A House version of the bill was introduced in 2013 by Rep. Earl Blumenauer, D-Ore., but never reached a vote.
Twenty-three states and the District of Columbia currently allow for the use of medical marijuana, while four have legalized at least some degree of recreational use.
Michael Cipriano is a student at American University in Washington, D.C., and an intern for The Cortez Journal.