Tax evasion and packaging

The first limitation that I know of on the size of packages for American alcohol happened in 1935 or so, with the gallon bottle rule for spirits.  Tun Yuan Hu, The Liquor Tax in the United States, 1791-1947: A History of the Internal Revenue Taxes Imposed on Distilled Spirits by the Federal Government (New York: Columbia University, Graduate School of Business 1950), page 98.

As WA and CO work on marijuana rules, they may consider a maximum package size less than the one ounce that adults may possess legally. That rule would track the liquor rule; it would work against tax evaders; it would add value, money, and work to the local economy — in a way that would be tax-deductible even under the harsh rule of Section 280E, because packaging is part of cost of goods sold.


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