Here is a message I sent Governor Brown of California about a bill to allow individual sellers of marijuana, like corporate sellers, to deduct advertising and marketing expenses on their state income tax returns:
AB 1863 loses revenue.
California should treat individuals and corporations alike for marijuana tax deductions: Let everything be deductible but advertising and marketing.
That might raise revenue (or maybe come out neutral to avoid 2/3). It would be better for the budget.
“perhaps the most practical tool against marijuana advertising is a tax tool like 280E. Call it the joker in the deck: There is no constitutional right to a tax deduction. A legislature may not be able, constitutionally, to ban commercial speech, but nothing requires a legislature to make selling costs tax-deductible. That is, tax deductions depend on ‘legislative grace’—the legislative branch can grant them, or deny them. If the First Amendment protected tax deductions, lobbying expenses would be deductible, but they aren’t. In 2014, Republican Way and Means Chair Dave Camp proposed that even standard advertising should not be totally deductible up front—some costs should be “amortized,” or spread out over time, because ads can produce long-term results.”
Center for New Revenue
Chapel Hill NC
Former Chief Tax Counsel of the U.S. Senate Finance Committee (under Lloyd Bentsen)
There’s a detailed look at how a compromise could work at that link, https://www.brookings.edu/blog/fixgov/2015/12/18/how-bob-dole-got-america-addicted-to-marijuana-taxes/.