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Tax Planning For Marijuana Dealers, Benjamin Leff

Articles in Law Reviews & Other Academic Journals

In recent years, many states have legalized marijuana while the federal government continues to consider all marijuana sales and use illegal. But marijuana industry insiders consider not federal criminal law but federal tax law to be the biggest impediment to the development of a legitimate marijuana industry. State-sanctioned marijuana sellers are required to pay federal income taxes pursuant to § 280E, a formerly largely symbolic provision that Congress enacted to punish drug dealers, but which now could potentially drive legitimate marijuana sellers underground. This paper proposes a tax strategy that enables state-sanctioned marijuana sellers to avoid the impact of § …