U.S. Senators Pete Ricketts and James Lankford have introduced a bill aimed at preventing marijuana businesses from deducting business expenses on their federal taxes. The proposed legislation, known as the No Deductions for Marijuana Businesses Act, seeks to block tax breaks for these businesses.
Senator Ricketts stated, “The federal government should not be subsidizing an industry that profits from addiction and undermines public safety.” He emphasized that the bill is designed to ensure marijuana businesses do not receive tax advantages while violating federal law.
Echoing similar sentiments, Senator Lankford remarked, “Marijuana doesn’t make our families stronger, our streets safer, or our workplaces more productive.” He added that businesses selling federally illegal drugs should not benefit from federal tax breaks. “This bill clarifies federal tax law to make sure a federally illegal product does not have a federally legal tax deduction,” Lankford said.
Dr. Kevin Sabet, President and CEO of Smart Approaches to Marijuana (SAM), also supported the legislation. He stated, “The federal government should not be in the business of giving tax relief to the federally illegal, addiction-for-profit marijuana industry.”
Current tax law under the Tax Equity and Fiscal Responsibility Act of 1982 prevents businesses involved with Schedule I or II drugs from deducting business expenses. However, if the Biden Administration’s efforts to reschedule marijuana succeed, it could allow these businesses to take deductions. This bill aims to prevent such a scenario by ensuring marijuana-related business expenses remain non-deductible.
The text of the bill is available for public viewing.
