|Photo: Eric Wolfe
|Steve DeAngelo, executive director of Harborside Health Center, Oakland’s largest medical marijuana dispensary, looks over a marijuana display case
The U.S. Internal Revenue Service is auditing medical marijuana dispensaries in California, with advocates calling for a change in federal tax laws.
The sale of medical marijuana from nonprofit dispensaries is legal under California law, but possession, cultivation or sale of cannabis for any purpose is illegal under federal law. Patient collectives in California say there is a problem because of the way they are being treated by the IRS, reports CNN
The problem is federal tax code 280-E, which does not allow “drug trafficking organizations” to deduct business expenses.
“If 280-E were applied strictly, we would not be allowed to deduct our rent, our payroll or any of the other normal and usual expenses that other businesses deduct,” said Steve DeAngelo of Harborside Health Center, one of the biggest Bay Area dispensaries.