Thursday, April 25, 2013

You Can Learn About Taxing Marijuana At Harvard

Harvard Law School Teaches About Taxing Marijuana

As most of you know, the legalization of marijuana is closer than ever, as the District of Columbia and 18 other states of the US have already changed their regulations about this herb and there are other countries of the world that are doing the same.  The problem is that most of these states and other countries of the world are still not quite sure about how they should be taxing marijuana, but now with the help of Harvard professors, we just might have a better chance to get this herb legalized worldwide.

According to federal laws in the US, even medical marijuana dispensaries are drug dealers and this has not allowed the states and local laws to establish a tax act that really works for everyone and helps to legalize marijuana everywhere.  According to Section 280E from the federal tax code, these types of businesses do not get any tax deductions, which is why taxes are so high and they are affecting patients, recreational users, dispensaries and other cannabis related businesses. The leading trade publication for the marijuana industry reports stated that “The federal tax situation is the biggest treat to business and could push the entire industry underground again.”

This is why some Harvard professors are now studying the current taxing marijuana acts, as they believe that there are some simple solutions to all of these problems and that they can help both medical and recreational marijuana legalization to continue prospering.

The Ideas That Harvard Professors Have About Taxing Marijuana

According to experts from Harvard, finding some way for dispensaries to deduct some expenses that are not related to the sale of cannabis, would help them to become more profitable and this would also benefit patients and recreational users.  One example that Harvard professors gave was that dispensaries could have a separate business, for example a care-giving business, where they would be able to deduct some taxes from and would lower their expenses every month.  They also stated that if not all of the establishment is used to sell marijuana, dispensaries would also be able to deduct their rent from taxing and they also stated how keeping a perfect record of all transactions is essential for all cannabis related businesses to succeed. (Just like any other business out there.)

Professor Benajmin Leff, from Harvard as well, presented his idea about this topic yesterday and the title of his report is quite interesting: “Tax Planning for Marijuana Dealers.” According to this study, which was featured in the Harvard’s Tax Policy Seminar, businesses that sell marijuana could have a social welfare organization, which does not generate any profits and which will help them to deduct taxes at the end of every month.  This would make Section 280E of the Federal Tax Act inapplicable for these types of businesses and would really benefit everybody.

Taxing Marijuana Needs To Be Changed Now

In order for the legalization of marijuana to continue its process, we must find a way to reduce the taxes that both state and federal laws are applying right now, as these will not allow these businesses to flourish and they will also affect the consumer in the end.  If Harvard professors are already paying attention to this, it can only mean that we are in fact getting closer to abolishing marijuana prohibition worldwide and we need to follow their example and keep promoting our cause.

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1 comment:

  1. Well, it depends on the production price of cannabis. Tax on ; made by farmers a 0,05 cent per gram, a normal price a 1 to2 euro per gram or commercial price a 7 to 12 euro per gram. That makes some difference.