A potentially game-changing decision by the U.S. Tax Court on the applicability of 280E to the cannabis industry has been delayed, but the attorney who tried the case expects a decision before 2018.
Attorney Henry Wykowski argued roughly a year ago before the court that section 280E of the tax code wasn’t intended to apply to law-abiding businesses such as his client, Oakland’s Harborside dispensary. He has since been awaiting a ruling, which could lead to a major boost in profit margins for cannabis companies.
“We still don’t have a decision … because the Tax Court realizes the importance of this issue,” Wykowski said Wednesday during a panel discussion at a business conference hosted by the National Cannabis Industry Association (NCIA).
“The judge (on the case) has said he understands how this will make a difference for everyone in the industry,” said Wykowski, who related that the judge said he would “write his decision (and) circulate it to the rest of the judges on the Tax Court.”
Wykowski said he may end up appearing before the court in Washington DC but expects “by the end of the year we will have a decision on that case.”
A win by Wykowski and Harborside could essentially wipe 280E off the books, which would dramatically decrease the amount of federal taxes marijuana companies pay annually.
The court case could prove crucial if the cannabis industry is to score a win on tax reform in 2017, since NCIA lobbyist Michael Correia said during the same panel there’s “about a 5% chance” of Congress acting to exempt state-licensed MJ businesses from 280E this year.
Reposted from Marijuana Business Daily
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