#Marijuana: High On #Taxes

pot sales

Legally selling marijauna? Federal law prohibits deductions for business expenses such as rent, office expenses, etc. however the IRS concedes that excise taxes levied by states on the sale of marijuana can be written off due to the fact that the tax is a reduction on the amount realized in the sale. Currently the state of Washington charges and Colorado charge a 37% and 15% tax respectively on the retail sale of marijuana. What is also notable is that the IRS will allow a deduction for the cost of the marijuana that is sold but not forfeited – a taxpayer in California had his medical dispensary raided by the feds and was not allowed to deduct the cost of the marijuana that was seized due to the fact that there was no sale.

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