No Deductions for Marijuana Businesses Act
Summary
What This Bill Does
The No Deductions for Marijuana Businesses Act rewrites Internal Revenue Code section 280E. No deduction or credit is allowed for amounts paid or incurred in carrying on a trade or business if the business consists of trafficking in marijuana, as defined in the Controlled Substances Act, or in Schedule I or II controlled substances. The rule applies to amounts paid or incurred after enactment in taxable years ending after that date. The bill is designed to keep cannabis businesses from receiving ordinary business deductions or credits even if marijuana's scheduling treatment changes.
Who Benefits and How
Federal taxpayers benefit because marijuana businesses cannot reduce taxable income with ordinary deductions or credits. Anti-marijuana advocacy organizations benefit because the tax code continues to penalize commercial marijuana trafficking. Competing non-cannabis retailers benefit if cannabis businesses remain subject to higher effective tax rates. Federal drug-control agencies benefit from a tax rule aligned with controlled-substance restrictions.
Who Bears the Burden and How
Marijuana businesses bear higher federal tax liability because ordinary business deductions and credits are denied. Cannabis retailers must continue operating under a harsher federal tax regime than many other businesses. Cannabis accountants must separate nondeductible marijuana business expenses from any allowable cost treatment. The Internal Revenue Service must enforce section 280E against marijuana and Schedule I or II businesses.
Key Provisions
- Amends section 280E to explicitly cover marijuana businesses.
- Amends section 280E to deny deductions and credits for businesses trafficking in Schedule I or II controlled substances.
- Provides that the rewritten rule applies to amounts paid or incurred after enactment.
- Maintains a higher effective federal tax burden on cannabis businesses.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Rewrites section 280E to deny deductions and credits for marijuana businesses and Schedule I or II controlled-substance trafficking businesses for amounts paid or incurred after enactment.
Key Policy Areas
Tax, Cannabis, Controlled Substances
Primary Purpose
Rewrites section 280E to deny deductions and credits for marijuana businesses and Schedule I or II controlled-substance trafficking businesses for amounts paid or incurred after enactment.
Policy Domains
Resolution provisions
Identified Gains
- Federal taxpayers
- Anti-marijuana advocacy organizations
- Non-cannabis retailers
- Federal drug-control agencies
Identified Costs
- Marijuana businesses
- Cannabis retailers
- Cannabis accountants
- Internal Revenue Service
Sponsors
Legislative Progress
In CommitteeMr. Arrington (for himself, Mr. Edwards, Mr. Murphy, Mr. Buchanan, …
Referred to the House Committee on Ways and Means.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
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