If you believe numbers from the marijuana industry, repeal of federal tax Code section 280E might cost some $1.3 billion in 2020 alone, and then rise steadily after that.
Right now, section 280E says sellers of federally illegal drugs can’t deduct advertising, marketing, or selling expenses. They can deduct only cost of goods sold. They deduct product cost – what they pay to grow marijuana, or to buy it from a grower or reseller.
Once marijuana is no longer a federally illegal drug, 280E ceases to apply, and its revenue disappears.
How much revenue would 280E’s disappearance lose? That’s a tough question, and I don’t know. According to some industry numbers, though, repeal could cost over $1 billion a year in federal tax revenue by 2020. Continue reading “280E revenue cost”