A pivotal new bill (S.471) introduced by US Senators James Lankford (R-OK) and Pete Ricketts (R-NE) aims to curtail a $2.3 billion marijuana industry tax break by amending Section 280E of the federal tax code. The legislation, backed by Smart Approaches to Marijuana Action (SAM Action), seeks to ensure marijuana explicitly remains under the scope of Section 280E, which prohibits businesses trafficking in Schedule I and II substances from claiming business expense deductions.

Under current discussions, reclassifying marijuana to a Schedule III drug would, however, exempt the cannabis industry from these regulations, thereby allowing businesses to exploit lucrative tax write-offs. Critics argue that this move could, in turn, jeopardise billions in federal revenue, ultimately shifting the financial burden onto taxpayers. Therefore, by preserving Section 280E’s coverage, S.471 aims to prevent significant losses to the government’s budget and discourage businesses from profiting from substances deemed federally harmful.

Moreover, Dr. Kevin Sabet, President and CEO of SAM Action, praised the Senators’ leadership. He stated, “The federal government should not be complicit in granting financial advantages to an addiction-based industry. S.471 will prevent revenue gaps caused by cannabis business tax relief.” Furthermore, Sabet attributed the bill’s rapid development to Senator Lankford’s commitment to fostering fiscal responsibility.

Positioned ahead of budget reconciliation, the bill has garnered attention. It pushes back against normalising commercial incentives like the marijuana industry tax break for substances that carry public health risks. Its backers argue the legislation strengthens federal oversight of businesses that engage in potentially harmful practices. The bill aims to safeguard both societal and financial interests. Public debate continues as lawmakers consider the wider implications of this proposal.

Source: Learn About Sam