Wolters Kluwer Tax & Accounting looks at tax issues surrounding the growing legality of the production, sale and use of marijuana at the state level while it remains a controlled substance at the federal level.
- The Internal Revenue Service (IRS) has recently posted a webpage specific to the marijuana industry providing tax guidance and answers to frequently asked questions to industry participants
- States may impose excise taxes, retail sales taxes, and license fees on various elements of the marijuana industry, including growing, production, distribution, and retail sale
- The IRS taxes industry participants on gross sales, with deductions only allowed for cost of goods sold
- Efforts to segregate the activities into two separate businesses and allocate expenses to the non-cannabis business have only been successful where the businesses are very separate, and one is not dependent on the other
- IRS guidance addresses payment options for paying in cash since many marijuana businesses have trouble obtaining banking accounts, including estimated tax payments
- The IRS guidance also addresses record keeping requirements
- Efforts continue in Congress to legalize marijuana at the federal level, but they have so far been unsuccessful
Who: Tax expert Mark Luscombe, JD, LL.M, CPA, principal federal tax analyst at Wolters Kluwer Tax & Accounting, and Carol Kokinis-Graves, JD, attorney and senior state tax analyst at Wolters Kluwer Tax & Accounting, can help explain the various tax issues associated with the cannabis industry.
Contact: To arrange an interview with Mark Luscombe and Carol Kokinis-Graves, or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact Bart Lipinski.
About Wolters Kluwer Tax & Accounting
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