Dispensary Tells 9th Circ. Pot Biz Tax Law Is Unconstitutional

By Diana Novak Jones (May 27, 2020, 6:24 PM EDT) -- California cannabis dispensary Harborside is urging the Ninth Circuit to strike down a clause in the tax code that bars companies like it from taking business deductions, arguing in a brief filed late Tuesday that the clause is unconstitutional.

Harborside Health Center filed its opening brief in an appeal of a U.S. Tax Court judgment that left the company with an $11 million tax liability, arguing the clause — 280E — violates the 16th Amendment because the taxes levied on marijuana businesses ignore the amendment's reliance on "income."

The 16th Amendment only gives Congress the power to tax income, which is...

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