IRS Code 280E was passed by the US Congress in 1986 against the people who have a business involving selling of marijuana or other drugs which fall in the Schedule 1 category, preventing them from filing their income tax returns. However, today is not the case. With the legalization of marijuana in some states and its medicinal use, marijuana businesses can file their income tax returns but within the rules and regulations provided in the IRS Code 280E. To conduct any marijuana business, owners and entrepreneurs must understand this section and conduct their business according to the rules and regulations mentioned in the section.
According the rules and regulations mentioned in the section, for any business operating within the marijuana industry, expenditures like advertisement, budtender wages and costs related to rent etc. are not tax deductible.There are certain deductions which are allowed and also some which are not allowed. The expenditures related to marijuana production, extraction, producing infused product, growth and cultivation of the plant and tax deduction allowed. Allowable taxes are based on the gross income of the business, not the net income. After the review of the facilities operation and the expenses that occur, it is determined that how much the business will obtain.
If you are wondering how to open a medical cannabis business, then take our cannabis business workshop at California college for cannabis, in San Diego, Pasadena and Sacramento; Our attorneys and industry leading network of professionals will be hosting a to go over all aspects of cannabis business licensing, start-up and operation.
At 420 College – it all begins with helping YOU to understand what is proper, lawful and appropriate!
Our hands on medical cannabis business start-up seminars or one-on-one consultations are perfect way to get started!
You get an intense 2 days of advanced information about how to start and operate a medical cannabis business in California. Find out how 420 College 2 DAY seminars can help you in your business, click here.