Who is the Colorado Criminal Justice Reform Coalition?

Our mission is to reverse the trend of mass incarceration in Colorado. We are a coalition of nearly 7,000 individual members and over 100 faith and community organizations who have united to stop perpetual prison expansion in Colorado through policy and sentence reform.

Our chief areas of interest include drug policy reform, women in prison, racial injustice, the impact of incarceration on children and families, the problems associated with re-entry and stopping the practice of using private prisons in our state.

If you would like to be involved please go to our website and become a member.

Friday, October 07, 2011

IRS Ruling Strikes Fear in the MMJ Industry

In a potentially crushing blow to the burgeoning medical marijuana industry, the IRS has ruled that dispensaries cannot deduct standard business expenses such as payroll, security or rent.
Harborside Health Center, one of the nation's largest medical marijuana dispensaries and considered a model for the industry, is on the hook for $2.5 million in taxes from 2007 and 2008.  That is $2 million more than the Oakland, Calif.-based company paid for those tax years.
“I see only two outcomes here,” said Steve DeAngelo, director and chief executive of Harborside. “Either this IRS assessment has to change or we go out of business. There really isn’t a middle ground for us.”
DeAngelo says the ruling will likely be appealed. He has 90 days to respond to the ruling.
The IRS ruling is based on an obscure portion of the tax code -- section 280E -- passed into law by Congress in 1982, at the height of Reagan administration’s “war on drugs.” The law, originally targeted at drug kingpins and cartels, bans any tax deductions related to "trafficking in controlled substances."
Although 16 states and the District of Columbia have passed laws allowing medical use of marijuana, the federal government still considers it a Schedule I drug, the most restrictive category with the harshest penalties.
The Internal Revenue Service refused to comment on the specific case, but letters sent from Andrew Keyso, IRS deputy associate chief counsel, to some members of Congress spell out the official position:

“Section 280E of the Code disallows deductions incurred in the trade or business of trafficking in controlled substances that federal law or the law of any state in which the taxpayer conducts the business prohibits. For this purpose, the term “controlled substances” has the meaning provided in the Controlled Substances Act. Marijuana falls within the Controlled Substances Act.”


GRP said...

We are under a "government of laws", not a "government of men". But if someone can plant drugs among your belongings, and if you are then required to prove that the drugs are not yours (which you can't), then you are under a government of men, namely of those who are willing to plant evidence. Therefore the reverse onus of proof cannot be valid in any jurisdiction.

More: http://is.gd/noreverse.

Anonymous said...

Since pharmacies, doctors, hospitals, and drug companies issue "controlled substances" this law would demand that we tax them for their entire profits. That would solve the budget problems. mpc