Republican Lawmakers Introduce Bill to Block Marijuana Tax Deductions Amid Rescheduling Debate
A group of seven Republican representatives has introduced a bill aimed at blocking businesses from claiming tax deductions for expenses related to marijuana, even if the substance is federally rescheduled. The move comes as the debate over marijuana rescheduling continues, with the Drug Enforcement Administration (DEA) facing delays in its review of the substance’s classification.
The bill, introduced by Representative Jodey C. Arrington, Chairman of the House Budget Committee, would amend the Internal Revenue Code of 1986 to uphold the ban on tax deductions or credits for businesses involved in marijuana trafficking. This would prevent marijuana businesses from claiming federal tax deductions under IRS Code 280E, even if the substance is rescheduled from Schedule I to Schedule III under the Controlled Substances Act (CSA).
The proposal is opposed by marijuana advocates, who argue that maintaining 280E prohibitions would only help the illegal market by making legal marijuana less competitive. They claim that the bill would prevent $2.3 billion in tax cuts for marijuana businesses, which could lead to a surge in illegal activity.
The move is seen as a way for lawmakers to curb any potential benefits for the marijuana industry, which has been monitoring the federal rescheduling process. While President Donald Trump has expressed support for rescheduling and decriminalization, his administration has not yet taken an official stance on the matter.
The bill has been met with criticism from marijuana advocates, who argue that it would harm the legal industry and drive business towards the illegal market. They claim that the bill would prevent marijuana businesses from being competitive, leading to a surge in illegal activity.
The debate over marijuana rescheduling is ongoing, with the DEA facing delays in its review of the substance’s classification. The proposed bill is seen as a way for lawmakers to maintain the status quo and prevent any potential benefits for the marijuana industry.
