Puff, Puff, Tax: Internal Revenue Code Section 280E Penalizes State-Sanctioned Marijuana Companies and Undermines the Ability-To-Pay Principle

This Comment argues that Internal Revenue Code § 280E unfairly penalizes state-licensed marijuana businesses by denying ordinary business deductions and taxing them on amounts that may exceed their actual profits. Examining the history of § 280E and recent challenges by marijuana dispensaries, the Comment contends that the provision undermines the ability-to-pay principle and threatens the viability of legitimate cannabis businesses operating under state law. It concludes that Congress should amend or repeal § 280E as applied to state-sanctioned marijuana companies.[This abstract was written by Microsoft Copilot, a generative artificial intelligence.]