WASHINGTON: Tax Day is source of unhappiness for marijuana industry | Economy | McClatchy DC
Legalization will lessen the stigma of recreational drug use, perhaps increasing demand.
But federal tax policy will give illegal dealers a great price advantage over legal businesses,
who must pay income tax on gross income (no business deductions allowed).
“If someone spends $100 in our store, $77 of it is going to some form of tax – that’s federal, state, sales, whatever,” said Tim Thompson, co-owner of a pot shop called Altitude in Prosser, Wash. “There’s a lot of people staying out of the recreational market because the black market is cheaper, and the reason is because of these taxes and lack of write-offs.”
Legalization will lessen the stigma of recreational drug use, perhaps increasing demand.
But federal tax policy will give illegal dealers a great price advantage over legal businesses,
who must pay income tax on gross income (no business deductions allowed).