Dana Rohrabacher Co-Sponsors Bill Saving Pot Clubs Cash

Everybody's favorite surfing congressman, Dana Rohrabacher, (R-Surf City), has co-authored legislation on Capitol Hill that would save medical marijuana dispensaries untold thousands of dollars per year in tax charges. We heard this amazing news courtesy of our Bay Area sister paper, the SF Weekly, which broke the news on its Snitch blog yesterday. Since 1986, the paper pointed out, U.S. tax law has explicitly banned businesses from deducting “sales of illegal drugs” on their tax forms.

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Does this mean people were actually deducting drug sales on their tax returns before 1986? Yes, it turns out, and by “people,” I refer of course to “cocaine kingpins.' Anyways, the new bill, authored by Pete Stark (D-Fremont), is called the “Small
Business Equity Tax 2011), and it would allow dispensaries to deduct the cost
of medical marijuana from their federal income tax payments.

Specifically, the the proposed law creates an exception to current tax code that allows “amounts paid or incurred in connection with the trade or business consisting of sales of marijuana….intended for patients for medical purposes pursuant to the laws of a state” to be claimed as federal tax deductions.

The bill was just introduced on Wednesday, so it's too early to see how quickly it moves forward. But given that it already has bipartisan support, perhaps the day may soon come when the IRS will no longer be able to build tax evasion cases against cannabis clubs throughout California and the 16 other states (as well as the District of Columbia) that have legalized marijuana for medical use.

Who knows, maybe the cash-strapped county and city governments in states that have legalized medical marijuana will even figure out how to get some of that tax revenue for themselves and start saving jobs–including their own.