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Marijuana Taxes Are Upheld, But Paying Them Could Incriminate You


Reefa

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Remember Lois Lerner? She’s the IRS Exempt Organizations Chief whose emails disappeared but whose texts revealed bias against conservative groups. She has refused to testify multiple times claiming protection under the Fifth Amendment. The right not to incriminate yourself runs deep in our Constitution.

Even so, a Colorado tax on marijuana has been upheld by a federal court despite claims that paying it amounts to self-incrimination violating the Fifth Amendment. Plaintiffs want the taxes on recreational pot outlawed, reasoning that they require businesses and consumers to implicate themselves in federal crimes. The plaintiffs lost on getting an injunction at this point, but that doesn’t mean the lawsuit is over.

Indeed, the lawsuit challenging the taxes will continue, and the stakes are high. In Colorado, there’s a 2.9% sales tax plus a 10% marijuana sales tax. Plus, there is a 15% excise tax on the average market rate of retail marijuana. If you add that up, it’s 27.9%. Medical marijuana only pays the 2.9% sales tax.

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Victoria, the nation’s first legal medical marijuana plant. (Photo credit: Wikipedia)

The argument is pretty clever: making you pay these taxes is making you admit to the government that you are violating federal law. Even getting witnesses is tough, said one of the lawyers involved. After all, just being a witness would mean incriminating oneself!

Under federal law, marijuana is still illegal and a controlled substance, even for medical use. And the gulf between federal law and recreational marijuana seems even bigger. Of course, this isn’t the only context raising the conflicting federal and state laws over marijuana. The tax problems of the industry remain a major impediment.

Section 280E of the tax code denies even legal dispensaries tax deductions. The IRS says it has no choice but to enforce the tax code passed by Congress. “The federal tax situation is the biggest threat to businesses and could push the entire industry underground,” the leading trade publication for the marijuana industry reported. One answer is for dispensaries to deduct expenses from other businesses distinct from dispensing marijuana.

If a dispensary sells marijuana and is in the separate business of care-giving, the care-giving expenses are deductible. If only 10% of the premises are used to dispense marijuana, most of the rent is deductible. In allocating expenses between businesses, good record-keeping is essential.

But there is only so far one can go. Some marijuana sellers operate as nonprofit social welfare organizations so Section 280E shouldn’t apply. Some claim dispensaries should be organized as cooperatives or collectives.

The proposed Marijuana Tax Equity Act would end the federal prohibition on marijuana and allow it to be taxed. That way growers, sellers and users would not fear of violating federal law. The bill would also impose an excise tax on cannabis sales and an annual occupational tax on workers in the growing field of legal marijuana.

Colorado’s tax law is bringing in considerable revenue, and that may influence attempts to derail the tax. Early reports suggested that the taxes might be attacked as unconstitutionally high. But the Fifth Amendment assertions are more sophisticated. Not only that, they jab at the already sensitive issue of the conflict between state and federal law. As medical marijuana has gained widespread acceptance and now recreational marijuana is taking hold, the federal v. state conflict grows deeper.

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If it can incriminate you for paying the tax, isn't the tax then illegal to begin with? If following a law that is a crime is mandatory, this creates unavoidable incrimination on both ends. If both parties are mutually guilty of a crime, this opens the doors for a higher authority to claim responsibility to take legal actions against both us and the lower echelons in Government. I also believe this can be considered some form of entrapment.

https://en.wikipedia.org/wiki/Entrapment

In criminal law, entrapment is a practice whereby a law enforcement agent induces a person to commit a criminal offense that the person would have otherwise been unlikely to commit.[1] It is a type of conduct that is generally frowned upon, and thus in many jurisdictions is a possible defense against criminal liability.

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Tommy Chong is 100% correct! :clap: Check out the video below, the part relevant to this thread starts at the 3min 3sec mark in the video.

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Basically it's like giving to a cirrhosis pacient alcohool to cure his ilness :)) Who in his right mind wild legalize drugs.

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Airstream_Bill

Just came through Colorado, Green Crosses everywhere so that one knows where to buy it. Takes a special license to sell edible products made from the substance though.

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Basically it's like giving to a cirrhosis pacient alcohool to cure his ilness :)) Who in his right mind wild legalize drugs.

Uhhhmmmmm...Pot is already legal in Colorado. The question is > Should it be taxed? :chuckle head:

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Under United States Federal Law it is still illegal.

State laws CANNOT trump federal laws, Federal laws can be enforced at any time, now, or in the future.

watch the fun and hilarity.

dont buy "legal" weed in colorado. simple as that get, your shit on the street as usual. its cheaper too :) no fuckin taxes.

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What Are Federal Marijuana Laws?

Federal marijuana laws are the laws that the federal government enacts to criminalize majijuana possession, sale, and cultivation. Each U.S. state also passes their own marijuana laws, but when these laws are in conflict with the federal rules, the federal rules control. Traditionally drug crimes are prosecuted at the state level. But because some states have decriminalized marijuana crimes (such as for medicinal purposes), federal prosecutions for marijuana possession/sale/cultivation are becoming more common.

The distinction is important, because while many states have rather lax laws concerning marijuana use, the Federal Government has some extremely strict penalties, some of which involve decades of jail time.

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i do not think any federal government will wade into this by starting to prosecute minor possession any one who is legally growing or selling at the state level....i do see them however stepping in and demanding their cut of the revenue on many levels...i have a very few US stocks..i get a dividend check every few weeks for about 5usd...i just received a letter for the IRS demanding i fill out a form for them to decide if i owe them any taxes...so yes if they are going after a few cents i do see them going after a what will will become a multi billion dollar industry for their cut

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