280E Conformity — with CA update

States that have income taxes (not all do) and that legalize marijuana face an arcane income tax issue:   280E conformity. Simply put, should marijuana businesses, on their state income tax returns, be able to deduct all expenses? Federal section 280E, discussed a good bit at www.newrevenue.org, allows businesses in violation of federal narcotics laws to deduct only cost of goods sold – and not, for instance, selling expenses.  Many state income tax laws track — conform to — the federal tax Code.  That’s why, when you fill out a state tax return, much of the data you need to enter peels off the federal return.

In Oregon, before the 2014 marijuana initiative, state tax law conformed to 280E — it followed the federal tax Code.   Then Measure 91 repealed the state’s version of 280E across the board. Now critics are saying repeal should apply only to marijuana – not to all federally illegal drugs, such as meth and heroin.  Good catch, I suppose, so long as Oregon voters are mad at other drugs.

In California, there is 280E conformity for individuals but not for corporations.  (Huh?)   Continue reading 280E Conformity — with CA update

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Cigarette tax %

In the USA, government gets 60.3 percent of the total price, while the private supply chain gets 39.7 percent. Or the total government take is 152 percent of what the private sector gets.  In Europe, the comparable numbers for government are around 80 percent, and 400 percent.

U.S. numbers are calculated from: “A cigarette pack today fetches roughly $2.50 at the factory gate, on which government collects $3.80 on average Continue reading Cigarette tax %

Marijuana Quotas, Part 1

Demand for marijuana growing licenses or quotas will exceed supply, right?

At some point, someone will have to say who gets them.  Who will say?  And how?  If the basis is past activity, How will the decider evaluate whether claims of historic growing are exaggerated?

And once the decider decides, what appeals will be allowed?  If appeals are allowed, to whom?

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A tremendous place to start is “Prosperity Road: the New Deal, tobacco, and North Carolina,” by Anthony J. Badger.  I’m reading it for the second time, this time making notes. Continue reading Marijuana Quotas, Part 1