WASHINGTON — Two Democratic U.S. Representatives from Colorado introduced legislation that would allow pot shops to claim the same business expenses and deductions on their federal tax forms as ordinary companies.
Jared Polis of Boulder and Ed Perlmutter of Golden argued for changing the Internal Revenue Service tax code to permit marijuana businesses to claim the regular standard deduction and deduct for rent and wages.
“The federal government should not be in the business of picking winners and losers,” Polis said in a press release, which also called for a “level playing field” for businesses.
“We need to address the public safety, crime, and lost tax revenue associated when these legal and regular businesses are operating a cash-only system,” Perlmutter said in a statement.
The Small Business Tax Equity Act seeks to clear up the ambiguity in the federal tax code of businesses that states permit but the federal government does not. Marijuana is considered an illegal drug under the 1970 Controlled Substances Act.
Last year, voters in Colorado and Washington State approved challenges to the Nixon-era law, voting to legalize the recreational use of small amounts of marijuana. The passage of the citizens’ initiatives gained national headlines, but local initiatives to crack down on both medical marijuana dispensaries and the recreational use of pot have flown under the radar.
Last month, voters in Los Angeles approved an initiative that limits the number of medical marijuana dispensaries to 135 and raises taxes on them. Last year, voters in Douglas County approved an initiative to ban the commercial sale and operation of marijuana.
Polis said he was not fazed by the Silent-Majority era backlash against permissive pot laws and sought to equate resistance to marijuana legalization to that which occurred after Prohibition ended in December 1933.
“It’s great. We encourage local control. To this day Texas has dry counties,” he said in an interview at the Capitol Wednesday.
Polis acknowledged the bill has no Republican co-sponsors, but plans to lobby members to win more support for it.