Services & Regions of Operation
Taxes & Section 280E
Section 280E was enacted as a result of the Tax Court's ruling in Edmonson V. Commissioner. Under Section 280E, no deduction for ordinary and necessary business expenses for illegally controlled substances businesses are allowed.
Dispensaries, grow operations, labs, etc... however can deduct cost of goods sold (COGS) from its sales thereby lowering its gross profit. Cost of goods sold are the direct costs attributable to the production of the goods sold by a company.
Federal Form 8300 Reporting
The Bank Secrecy Act compels those who receive more than $10,000 of cash in their trade or business to report to the U.S. Treasury using form 8300.
Compliance exams for form 8300 identify transactions subject to reporting, and if the taxpayer is filing Forms 8300 when required. We offer our expertise to ensure that your business is in compliance with the U.S. Treasury, and that your business is ready anytime when it is audited.
Sales and Use Taxes
Certain sales of medical cannabis are generally exempt from sales and use tax. Regardless of medical or recreational, all sales must be reported and taxes paid to the appropriate government agency if no exemption applies.
If sales tax is included in the sales price, you must post a sign notifying your customers that the sales tax is included in the sales price. If signage is not posted on the premises visible to the customer, then sales tax will be based on the sales price and added to the receipt. We can help make sure that the appropriate payments are made on time and to the right agency.
Tax Representation
Due to cannabis businesses being cash businesses with new and complex tax requirements, the IRS is expected to conduct targeted and systematic audits. Let us handle the audits and make sure that you are compliant with the state and local authorities.
Bookkeeping
We offer bookkeeping services to ensure that you are properly deducting the correct expenses. We also can help make sure you are following IRC Section 280E and keeping compliant with Federal Law.
Payroll
As the owner of a cannabis business, there are plenty of things to keep you busy, and taking care of marijuana payroll is just one more thing that distracts your attention from taking care of your core business.
We can help you create payroll compliant with the federal and state labor laws. This includes appropriate tax deposits and payroll tax reports.