Thinking Clearly

Marijuana dealers get slammed by taxes: Some medical marijuana sellers face tax rates as high as 75%
By: Steve Hargreaves

NEW YORK (CNNMoney) -- Thanks to a decades-old law targeting drug runners, entrepreneurs in the nascent medical marijuana industry face a unique burden: an effective federal income tax rate that can soar as high as 75%.
 
The hefty levy is the result of a 1982 provision to the tax code, known as 280E, that stemmed from a successful attempt by a convicted drug trafficker to claim his yacht, weapons and bribes as businesses expenses, according to 280E Reform, a group working to overturn the statute.

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 "An emerging industry that can provide hundreds of thousands of jobs is being held back by these crazy tax rates," said Betty Aldworth, deputy director of the National Cannabis Industry Association.