DENVER--(BUSINESS WIRE)--The New Federalism Fund applauds Reps. Carlos Curbelo (R-FL 26), Earl Blumenauer (D-OR 3) and Sens. Ron Wyden (D-OR), Rand Paul (R-KY) for introducing the Small Business Tax Equity Act of 2017 in the U.S. House and Senate on Thursday, March 30. The bills will fix federal tax code 280E, which currently prohibits legal, state-based cannabis businesses from making standard business deductions on their federal tax returns. Under the current system, 280E saddles cannabis businesses with an effective tax burden of 70% - 90%, or higher, leading to calls for reform that will create tax equity for the cannabis industry.
"We intend to do everything we can to help get this bi-partisan legislation passed," said Neal Levine, Chairman of the New Federalism Fund. “Thanks to the groundwork laid by Rep. Curbelo, Rep. Blumenauer, Sen. Wyden and Sen. Paul we have the opportunity to create a fair and equitable tax system for an industry that employs over 100,000 people in 28 states and contributes hundreds of millions of dollars in tax revenue each year.”
Enacted in 1982, tax code 280E was intended to prevent illegal drug dealers from deceiving the IRS. In recent years, the code has most frequently been misused as a tool to discourage legal cannabis businesses through excessive taxation by the federal government. Critics point out that the tax code should not be used to determine winners and losers in the marketplace, and that 280E is an example of federal overreach into state-based industry.
The New Federalism Fund will advocate for 280E reform alongside the National Cannabis Industry Association, which has represented cannabis businesses at the federal level since 2010. "There is no logic in financially penalizing businesses that are taking the cannabis trade out of the underground market. We are grateful to Rep. Curbelo, Rep. Blumenauer, Sen. Wyden and Sen. Paul for taking a leadership role on this legislation and look forward to working with their offices and our allies to build further support for these measures," said Aaron Smith, Executive Director of the National Cannabis Industry Association.
For more information on the Small Business Tax Equity Act of 2017 or to learn more about 280E visit http://www.newfederalismfund.org.
About New Federalism Fund
The New Federalism Fund is a non-partisan 501(c)4. Its board members and contributors are those interested in state-first regulation of state-based commerce and creating a common sense regulatory system for those who are in or serve the state-based cannabis industry.