IRS verbiage

OK, this is nitpicking, but http://www.irs.gov/pub/irs-pdf/f1023.pdf has this:

User fee increases are effective for all applications postmarked after January 3, 2010.

1. $400 for organizations whose gross receipts do not exceed $10,000 or less annually over a 4-year period.

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They could have said

$400 for organizations whose gross receipts do not exceed $10,000 annually over a 4-year period.

or $400 for organizations whose gross receipts are $10,000 or less annually over a 4-year period.

A virtue of bureaucracy is (or was) to have enough eyes look at drafts to prevent this kind of redundancy.  My faith is the Service is still great enough that I think I may be missing something.

Ethanol as usual

It looks like the late 2010 tax bill will sacrifice revenue to benefit ethanol, which is environmentally unfriendly, http://www.edf.org/page.cfm?tagID=1550, and competes with food production.  If the bill is going to be porked up, Senator Grassley is going to help his people (what else could he do?).   Even as a Democrat, I have admired Senator Grassley as a serious public servant generally, though not for this log-rolling.

Potency as a Base for a Tax on Marijuana — BOE

(For a more comprehensive discussion of this issue, go to http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1741735.)

Excerpt of email from California BOE spokesperson Anita Gore to the author, October 12, 2010 8:24:16 PM (before the outcome of Proposition 19 was knowable):

Staff has discussed the possibility of using potency as a component of an excise tax scheme.  Right now it is an option to consider, and when and if marijuana is legalized, and the legislature moves to impose an excise tax, a potency based tax would be a viable option if the legislature chooses to go in that direction.

With properly crafted legislation and sufficient resources staff believes it is doable.

Staff agrees there are issues around testing and certification like those you raise that would need to be addressed to support a potency based tax.  The question that goes with that is compliance.  Legalization itself will move distribution from an underground economy to a regulated industry.  Will the industry buy into that level of regulation?  No one knows.

Associated revenue – no way to know.

Potency testing — mechanics

(For a more comprehensive discussion of this issue, go to http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1741735.)

“Steep Hill Lab in Oakland, http://steephilllab.com/, conducts potency testing on medical cannabis using a 2 gram sample that statistically represents up to two pounds of medical cannabis.  The two gram sample is selected from 5 to 15 sites from the bulk material which has been determined to be sufficient to accurately represent potency.  Comprehensive scientific analysis is conducted and a certificate of analysis is generated for potency as well as other important factors such as microbiological contamination and pesticide residue.”

That’s an excerpt from an email to me from Wilson Linker at Steep Hill Lab of December 5, 2010, 9:43:35 PM.  He was correcting a draft I had sent him.

The Lab charges $120 per sample for flowers and concentrates.  http://steephilllab.com/services/potency-analysis/ (last visited Dec. 6, 2010).