LaBrenda Garrett-Nelson Joins Board

December 14, 2014 § 2 Comments

lab_1_1I’m happy to announce that my friend and retired tax expert LaBrenda Garrett-Nelson has joined the Board of Advisors of the Center for New Revenue. LaBrenda and I worked together for the Joint Committee on Taxation in the 1980s, where she  « Read the rest of this entry »

National Conference of State Legislatures slides — December 12, 2014

December 9, 2014 § Leave a comment

Oglesby Marijuana NCSL dec 12 6am slides — final for panel of December 12, 2014.

State law fix for 280E problem? Update with Buyer Pays — December 16, 2014

December 4, 2014 § Leave a comment

[Buyer pays (Nebraska sales tax rule) update at the end]  Maybe  a quick and tiny tweak to Washington’s state marijuana excise tax statute (and similar statutes in other states) could save businesses a lot of federal income tax under 280E, which lets federally illegal drug sellers deduct only cost of goods old.  Now I kind of like 280E, insofar as it prohibits deductions for advertising, marketing, point-of-sales displays, and the like (disfavoring those activities in a way that does not allow any argument about freedom of speech), but can’t imagine why federal taxpayers shouldn’t be able to deduct state excise taxes.  The industry complains mightily about 280E, but getting Congress to fix tax problems, or to help the marijuana industry, is not the work of a moment.

Luckily for the industry, no federal fix seems needed for this one signficant part of the 280E probelm. The Washington Legislature (and Legislatures of other states with the same problem) should be able to make excise taxes federally deductible with the stroke of a pen, I think, and try to explain below.

And maybe a quick fix is possible.  The Legislature has already shown it can act expeditiously to fix the Washington marijuana statute: “During the 2014 Legislative Session, I-502 was amended to explicitly allow the sale of extracts and concentrates.” http://liq.wa.gov/marijuana/faq_rules. Cutting the federal tax bill of a marijuana industry that’s struggling to beat the black market, at zero cost to the state, seems like an easy fix that might sail through on its own – even less controversial than allowing concentrates.

Here’s the story:

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Chumps and tourists

December 4, 2014 § Leave a comment

“I had a store owner in Colorado tell me that only chumps and tourists go to the [taxed] recreational side” of marijuana businesses rather than the tax-free medical side, Seattle City Attorney Pete Holmes said. http://www.usatoday.com/story/news/nation/2014/09/26/washington-marijuana-legal-scarce/16266573/

 

State marijuana monopoly?

December 4, 2014 § Leave a comment

You hear folks say states can’t run a marijuana monopoly because they would be ordering employees to violate federal law.  I’m not so sure. First, a monopoly is not indisputably illegal. Second, no one other than the federal government may have standing to complain.

I. Legality

The CSA’s definition of the term “person” – possible violators – does not include states of the Union. http://www.deadiversion.usdoj.gov/21cfr/21usc/802.htm « Read the rest of this entry »

California: No to medical marijuana, Yes to taxing it

November 22, 2014 § Leave a comment

“The California midterm election also saw more than a dozen local pro-medical marijuana initiatives fail in the state — even though every proposed medical cannabis tax passed.” Story here  and at http://www.eastbayexpress.com/oakland/green-lit-california-legalization-measure-is-a-go-for-2016/Content?oid=4127974

Introduction to Excise Taxes, by Sean Lowry of CRS

November 21, 2014 § Leave a comment

Federal Excise Taxes — Lowry is a good introduction to the field.  I learned some things, like this example:

ad valorem taxes imposed at the manufacturer’s level could provide an incentive for value-added options to be ordered further down the supply chain in an attempt to minimize the tax burden. For example, the manufacturer tax on firearms is levied on the assembly of a complete rifle, but any add-ons or modification kits to that rifle are not taxed.

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