Republican Congressman Willing to Help Legalized Cannabis Business

October 26, 2017

Republicans have gained notoriety for opposing the legalization of marijuana. No wonder, when any of the GOP members takes a deviation from the party͛’s standard stance and advocate the business of marijuana, they do it by keeping in mind the economical aspect of the cannabis business. Undoubtedly, legalized operations of cannabis sell can augment economy of any state and especially a boost in tax revenues can be witnessed. However, restrictions from federal echelon of powers often put state-legal cannabis business in tight spot. Therefore, to assist legalized cannabis business on state level, a congressman from the Republican Party has come forward.

Republican Mark Sanford, representing 1st District of South Carolina, in his latest social media post made it known that he had formally suggested the new bill with the name Small Business Tax Equity Act of 2017. This bill could be a milestone for cannabis businesses in the states that have gone through the process of legalization.

Tax inequities faced by legal marijuana business has its roots in the tax measures introduced by congress 35 years ago, when a section was added to disallow ventures ͞“trafficking in controlled substances͟” to have the benefits of various tax deductions and availing credits like other business operations. As consequences of this addition in the US tax code a usual business entity started to come in the 30% tax bracket as this amendment was done to support small ventures.

Honorable Mark Sanford – Image powered by Sanford.house.gov

However, this same tax measure goes against one type of small ventures i.e. state cannabis businesses. Since in the books of federal government these businesses traffic controlled substance as per Schedule I, therefore they can be able to get the benefits of those tax deductions.

Due to this tax inequity for small legalized cannabis ventures can come under tax bracket of 70%. These high taxes make it difficult for legalized cannabis business to survive, let alone the growth.

There is a general perception that the Republicans want tax reliefs for businesses nationwide and want to limit the excessive interference of federation in this regard.

The Tax Equity act is co-sponsored by Sanford entails that the legalized marijuana business should also have the same tax benefits albeit the federal laws disallowing some commodities for deductions.

Marijuana Tax – Image powered by Siskiyou.sou.edu

Sanford in his Facebook post said, “The principle here is simple. If a state makes something legal, it ought to be treated in par and equally with other legal businesses in the state.͟”

Moreover, he appealed his fellow congressman to back the Tax Equity Act regardless of their stance on the legality of marijuana. He thinks that the promise of GOP to shrink the overreach of Federal government must not be affected by one͛s opinion on cannabis.

If the proposed law gets ratified, it will surely help cannabis businesses to have healthy economical prospects. The bill also highlights the double standards of federal government who collect taxes on the ͚prohibited͛ substances.

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