If you’re unfamiliar with tax code 280e, you probably are not in the marijuana industry. Marijuana businesses that are operating legally under state licenses across 25 states and Washington, D.C. pay effective tax rates of 70 percent under the tax code. Under 280e, entrepreneurs can deduct costs associated with growing the plant, but nothing related to the retail business. (Some businesses, due to poor financial structuring, pay tax rates of 100 percent or more on their profits, Levy explains.) While the marijuana industry has accomplished a lot by reforming state laws, the road to profitability and sustainability is still far away and requires changing federal law, which has been resilient to the legalization movement.

During a panel on taxes at the National Cannabis Industry Association business summit and expo in Oakland, California last week, Wykowski, Thorburn and Levy said that marijuana businesses might want to just pay their high taxes and continue with their business, but more companies need to stand up against the IRS. Currently, Wykowski is representing Harborside, one of the nation’s largest dispensaries, in its current battle with the IRS to get 280e repealed.

Read more: http://www.inc.com/will-yakowicz/how-cpas-tax-lawyers-fighting-irs-for-marijuana.html