Dispensaries - What Can Be Deducted According to the 280E Tax Code?
What is the 280E tax code?
The purpose of the 280E tax code is to disallow businesses that deal in federally illegal controlled substances from deducting ordinary business expenses from their gross revenue for tax purposes. This code was established in 1982 to prevent drug dealers from using these tax deductions to lower their tax liability.
A report from the Congressional Research Service states that under Section 280E of the Internal Revenue Code, deductions and credits cannot be claimed for expenses related to conducting any trade or business that involves selling controlled substances listed in Schedules I and II of the Controlled Substances Act in violation of the federal or state law.
