Generally speaking, marijuana businesses can’t take the same tax deductions as other businesses. But that could change soon, at least at the state level, said Tulsa marijuana licensing attorney Stephen Cale.
The following is for information purposes only and is not legal or tax advice.
Section 280E of the Internal Revenue Code forbids businesses from deducting otherwise ordinary business expenses from gross income associated with the “trafficking” of Schedule I or II substances, as defined by the federal Controlled Substances Act. Under federal law, marijuana is a Schedule I drug.
Related: Internal Revenue Code Section280E: Creating An Impossible Situation For Legitimate Businesses
Sen. Cody Rogers (R-Tulsa) introduced SB 1117, Sen. Jessica Garvin (R-Duncan) introduced SB 389 and Rep. Forrest Bennett (D-Oklahoma City) introduced HB 2101. Under their bills, marijuana businesses would be treated the same as non-cannabis businesses and allowed to take deductions for State tax returns.
If passed, the bills would go into effect November 1st and would apply to tax years 2024 and later, said Tulsa marijuana licensing attorney Stephen Cale.
Related: Bill Introduced to Eliminate Agriculture Tax Deduction For Marijuana Producers
Beginning with tax year 2023, Missouri recently allowed state tax deductions for marijuana businesses as part of Amendment 3, an initiative that legalized adult-use marijuana in that state.
Oklahoma’s legislative session begins at noon Feb. 6, 2023. See Legislative Calendar.
Tulsa marijuana license attorney Stephen Cale is the founder of Cale Law Office. He has been serving people with legal needs for 24 years.
Cale works with a number of marijuana-related organizations. He is a Legal Committee member of the National Organization for the Reform of Marijuana Laws (NORML).
The Cale Law Office has helped numerous people acquire their commercial medical marijuana dispensary, processor, and grower licenses. If you want a marijuana business license, marijuana compliance auditing, or need legal representation in the Oklahoma marijuana industry, call the Cale Law Office at 918-771-7314. Your initial consultation is free. Or, contact us through the web.