Marijuana Businesses Still Barred from Deductions

While the Administration is considering a change in the classification of cannabis, as of now it’s still a Class I controlled substance. As such, marijuana businesses, such as dispensaries, can’t take any deductions, such as rent or advertising, under federal tax law even though they’re operating businesses that are legal under state law. They can reduce gross receipts by the cost of goods sold to determine gross income. The ban on deductions for cannabis businesses does not apply to businesses that grow or sell hemp (.3% or less THC). #IdeaoftheDay