The Taxation of Legal Cannabis Part 4: California State Income Tax

This article marks the end of this series’ emphasis on income tax. After introducing section 280E’s confiscatory effect, identifying the need for cannabis enterprise to maximize cost of goods sold adjustments (hereinafter “COGS”) and to diversify the enterprise’s business lines, I will conclude this discussion by describing California’s bifurcated state income tax treatment of cannabis enterprises.

The Taxation of Legal Cannabis Part 3: Allocating Expenses to a Separate Line of Business

I finished Part 2 of this series emphasizing section 280E’s principle force. Section 280E does not universally bar illegal commercial enterprises from deducting necessary and ordinary business expenses. Rather, section 280E only applies to businesses trafficking in substances banned under the Controlled Substances Act.

The Taxation of Legal Cannabis Part 2: Cost of Goods Sold

Last week I introduced the conflict between federal income tax law and state-sanctioned cannabis enterprises here and here.[1] In brief, the Internal Revenue Code (“Code”) section 280E proscribes state-sanctioned cannabis enterprises from deducting their ordinary and necessary business expenses like rent and employee salaries from gross income. Thus, cannabis enterprises are currently subject to tax on their gross income, not their net income.

The Taxation of Legal Cannabis Part 1

With the recent legalization of recreational cannabis sales in Alaska, Colorado, Oregon, and Washington,[1] the writing is on the wall for the world’s eighth largest economy.[2] As of the writing of this blog, there are eleven competing ballot propositions seeking to legalize recreational cannabis use in California in 2016.[3]

Changes Ahead in the California Death Penalty

The death penalty is setting up to be a hot topic in the next California election.  Advocates on both sides of the issue have proposed legislation to be voted on in 2016.  Proponents of the death penalty have asserted a ballot measure that would speed up executions in California while anti-death penalty advocates such as criminal defense attorneys aim to get a measure on the ballot which would repeal the state death penalty entirely.

SEC Levies Fine Against Diebold for FCPA Violations

Diebold, the company that makes ATM machines and security systems has run afoul of the FCPA [Foreign Corrupt Practices Act]. The SEC...