Harris’ proposal would impose a 5% federal tax on pot to pay for new social justice program. Her legislation would also extend significant income tax deductions that have been unavailable to business people in the cannabis industry, because of federal prohibitions on the drug.
“There’s actually a really big income tax cut in here,” said Carl Davis, research director at the Institute on Taxation and Economic Policy. “My expectation is that the cannabis industry would come out ahead under this bill and actually pay less in tax.”
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Under existing laws, pot business owners can’t write off expenses like rent, health care and employees’ wages, unlike entrepreneurs in mainstream fields, Davis said.
“They are not able to get access to really basic income tax deductions,” he said. Read more