Iowa Regulators Push To Exempt Medical Marijuana From Sales Tax And To Decouple State From Federal 280E Penalty On Businesses

Iowa Regulators Push To Exempt Medical Marijuana From Sales Tax And To Decouple State From Federal 280E Penalty On Businesses
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“They’re still going to get that hit from 280E…at the federal level, but at the state level, that burden could be reduced.” By Robin Opsahl, Iowa Capital Dispatch Iowa’s Medical Cannabidiol Board will ask the state Legislature to exempt medical marijuana products from Iowa’s sales tax and change its business licensing procedure for dispensaries. Iowa could follow other states’ lead in reducing costs for business owners and patients through changing state taxing systems for medical marijuana, board members said Friday. That includes exempting medical cannabidiol products from the state sales tax, as well as changing how the Iowa tax code classifies the sale of controlled substances. Marijuana is a Schedule I drug under the federal Controlled Substances Act, and the Internal Revenue Code Section 280E penalizes businesses that sell Schedule I or II drugs by not allowing the deduction of “ordinary and necessary” business expenses. There are no current provisions in Iowa’s tax code that states 280E does not apply, as some other states with legal cannabis have added. “[It] essentially just decouples, you know, Iowa’s tax code from the federal code for these purposes,” Owen Parker, Bureau Chief for the Board said. “They’re still going to get that hit from 280E, you know, that I mentioned at the federal level, but at the state level, that burden could be reduced.” Iowa currently follows the federal system for taxing companies dealing with controlled substances, even as their own state law differs on the substance legality. But the federal system may soon change as well. President Joe Biden called in October for the U.S. secretary of health and human services and the attorney general to review marijuana’s scheduling. If the substance is reclassified, these tax penalties would no longer apply to dispensaries. While the changes to code would lessen some of…

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Source : Iowa Regulators Push To Exempt Medical Marijuana From Sales Tax And To Decouple State From Federal 280E Penalty On Businesses

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