Florida's Cannabis News Podcast

Florida's Cannabis News Podcast Tuesday November 10, 2020 Cannabis Taxation—Part I—Introducing 280E and The Evolution of the Pro Taxpayer Internal Revenue Code. This week, David introduces Florida's Cannabis News Podcast's five part series on cannabis taxation. In this episode we give a 40,000 degree overview of what IRC Section 280E is and discuss the evolution of the United States' pro-taxpayer approach to the Internal Revenue Code.  Here are the highlights: Historically, the Internal Revenue Code (“Code”) and U.S. courts applied a taxpayer-friendly approach to determine the deductibility of business expenses. In determining deductibility, the legality of the income source was irrelevant. But, with the rise of President Richard Nixon’s ‘War on Drugs’ and the enforcement of ‘no tolerance’ drug policies in the 1970s, Congress restricted their taxpayer-friendly approach. In 1981, Congress enacted Section 280E into the Internal Revenue Code, which forbids businesses who traffic Schedule I or II substances, as d