Curbelo: Attorney General’s Marijuana Witch Hunt Favors Those Operating Illegally, Hurts Legal Businesses’ Ability to Compete

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WASHINGTON, Jan. 18, 2018 /Weed Wire/ — Last night, Representative Carlos Curbelo (FL-26), the sponsor of legislation to provide tax parity to legally operating marijuana businesses, joined a bipartisan group of House colleagues on the House Floor to discuss Attorney General Jeff Session’s recent decision to crack down on legally operating marijuana businesses and other federal regulations that ignore state’s rights and treat state-regulated businesses unjustly.

“In addition to the witch hunt opened up by the Attorney General’s actions last week, current federal law also prohibits these businesses from deducting the common expenses associated with running a small business when they file their taxes – expenses necessary to running a business like rent, most utilities and payroll,” Curbelo said. Simply put this rule places legitimate enterprises, which have been established under state law, at a major competitive disadvantage where legal employers are paying exorbitantly higher effective tax rates. That’s why I introduced H.R. 1810, Small Business Tax Equity Act last year. This bipartisan bill amends the tax code to allow legally operating marijuana businesses to utilize common tax deductions and credits, thus providing them with tax parity.

“The federal government should not be ignoring state’s rights and the decisions of voters and state legislatures across the country. We must work to afford all businesses selling legal products the opportunity to make appropriate deductions and contribute to our economy and create jobs,” Curbelo added. “The best ally that those who are operating illegally, the drug cartels, the drug traffickers – who do not pay any taxes, who target children – the best ally they have are the policies that the Attorney General has embraced. Because what happens, Mr. Speaker is that these legally operating businesses can no longer compete, and that people turn to the black market. So hopefully, inadvertently, I hope inadvertently, the Attorney General has actually done a great favor to those who operate outside the law, and is punishing those who are actually trying to control this substance, to keep it away from young people, to make sure that only those that have permission from their states, prescriptions from their doctors, can access this substance.”

Curbelo introduced the bipartisan Small Business Tax Equity Act of 2017, H.R. 1810, last year with Representative Earl Blumenauer (OR–3). The legislation would amend Section 280E of the Internal Revenue Code to allow marijuana businesses operating in compliance with state law to utilize common tax deductions and credits. Section 280E currently prohibits businesses that sell Schedule I or Schedule II substances from deducting legitimate expenses from their taxes. Congress added this prohibition in 1982 after a drug dealer claimed expenses associated with selling narcotics as legitimate business expenses. Marijuana is a Schedule I substance, and therefore, even marijuana businesses operating in compliance with state law are not allowed to deduct the common expenses of running a small business, like rent, most utilities, and payroll.

A full transcript of Curbelo’s remarks is available below, and a video of his remarks is available here.

Curbelo: Attorney General’s Marijuana Witch Hunt Favors Those Operating Illegally, Hurts Legal Businesses Ability to Compete
Washington, D.C.
January 17, 2018
https://youtu.be/aHDybMhDMYc

Representative Carlos Curbelo: “I thank my colleague, Mr. Gaetz, for this special hour to shine a light on this issue, on this issue – the federal government’s overreach and unjust treatment of legally operating businesses all across our country.

“Businesses that operate legally and in compliance with their state’s laws and regulations deserve a federal government that respects the 10th Amendment of the Constitution. Like my colleagues, I’ve been disappointed that when it comes to the treatment of these legal marijuana businesses, the current Administration, which supposedly respects the federalist model of our government, continues to take such drastic steps to ignore states’ rights and the decisions of voters and state legislatures across the country.

“In the 2016 elections, over 70% of Florida’s citizens voted to legalize the use of medical marijuana. The two counties that make up my own Congressional District in South Florida, Monroe and Miami-Dade, voted in favor of the measure 80.3% and 68.3% respectively. The voices and the votes of my constituents, Mr. Speaker, matter. The 10th Amendment of the Constitution matters. And for those who like to call themselves constitutionalists, the entire Constitution has to matter, not just the parts that are convenient at a given time.

“In addition to the witch hunt opened up by the Attorney General’s actions last week, current federal law also prohibits these businesses from deducting the common expenses associated with running a small business when they file their taxes – expenses necessary to running a business like rent, most utilities and payroll. Simply put this rule places legitimate enterprises, which have been established under state law, at a major competitive disadvantage where legal employers are paying exorbitantly higher effective tax rates. That’s why I introduced H.R. 1810, Small Business Tax Equity Act last year. This bipartisan bill amends the tax code to allow legally operating marijuana businesses to utilize common tax deductions and credits, thus providing them with tax parity.

“The federal government should not be ignoring state’s rights and the decisions of voters and state legislatures across the country. We must work to afford all businesses selling legal products the opportunity to make appropriate deductions and contribute to our economy and create jobs.

“And another important point, Mr. Speaker, and again, I thank my colleague for taking this time and bringing us together to talk about this issue in a bipartisan manner.

“The best ally that those who are operating illegally, the drug cartels, the drug traffickers – who do not pay any taxes, who target children – the best ally they have are the policies that the Attorney General has embraced. Because what happens, Mr. Speaker is that these legally operating businesses can no longer compete, and that people turn to the black market. So hopefully, inadvertently, I hope inadvertently, the Attorney General has actually done a great favor to those who operate outside the law, and is punishing those who are actually trying to control this substance, to keep it away from young people, to make sure that only those that have permission from their states, prescriptions from their doctors, can access this substance.

“So I am, again so grateful to join my colleagues tonight to call on the Attorney General, on this Administration, on this President, who when he campaigned said I will defer to the states, I will respect the states, and in this case, a state like Florida, which voted for the President also voted 71% to allow medical marijuana in our state. All the way from Key West to the Panhandle, the residents of Florida deserve to be respected.

“So I will continue working with my colleagues on this side of the aisle, across the aisle to make sure that our government respects states’ rights, to make sure that our government is on the side of those who want to operate within the law. those who want to pay taxes, those who want to be compliant, not the gangs and the illegal drug traffickers who are celebrating today as a result of this dangerous policy change.
“I yield back to my colleague from Florida Mr. Gaetz.”

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