Cannabis Businesses' Tax Litigation: The Lessons Learned

By Jennifer Benda (July 6, 2018, 3:41 PM EDT) -- Internal Revenue Code Section 280E creates incredibly harsh tax treatment for state legal cannabis companies. Why? During the War on Drugs of the 1980s, the U.S. Congress determined that in addition to punishing drug dealers under the criminal statutes, they would increase their taxes. So, drug dealers are not allowed deductions for ordinary and necessary business expenses in determining their tax liabilities. While the definition of drug dealer has evolved under state law, because federal law has not changed, the 1980s War on Drugs continues through the Internal Revenue Code.[1] To avoid constitutional limitations, Section 280E does allow cannabis businesses to deduct their cost of goods sold.[2] ...

Stay ahead of the curve

In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.

  • Access to case data within articles (numbers, filings, courts, nature of suit, and more.)
  • Access to attached documents such as briefs, petitions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and so much more!


Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!