Two Oregon Democrats are teaming up with anti-tax activist Grover Norquist to help companies selling marijuana slash their tax bills.
Sen. Ron Wyden and Rep. Earl Blumenauer are introducing legislation next week that would allow those companies to take normal business deductions that are currently unavailable to them.
{mosads}“Our legislation would provide an overdue update to federal tax law, which has not caught up to the fact that it’s 2015 and Oregonians have voted both to legalize medical marijuana and to regulate marijuana for recreational use,” Wyden said in a statement.
Almost half of U.S. states allow marijuana use for medical reasons, while four states — Alaska, Colorado, Oregon and Washington — have enacted laws clearing recreational marijuana use.
But businesses in those states can’t deduct their expenses tied to marijuana sales, because of a 1980s-era law aiming to combat illegal drug dealers. The end result, Wyden and Blumenauer said, was that legal marijuana businesses can be forced to pay tax rates as high as 90 percent.
Norquist, the founder of Americans for Tax Reform, had previously joined with Blumenauer to push legislation to help legal marijuana sellers. Both Wyden and Blumenauer serve on tax-writing committees, with Wyden the top Democrat at Senate Finance.
“The intent of the law was to go after criminals, not law abiding job creators,” Norquist said in a statement. “Congress needs to step up and clarify that this provision has become a case study in unintended consequences.”