280E still applies to marijuana companies, US Tax Court rules

280E, 280E still applies to marijuana companies, US Tax Court rules

The U.S. Tax Court ruled on a 2½-year-old case in which California-based Harborside had hoped to end 280E’s hold over the marijuana industry’s profit margins.

But the Oakland company’s hopes were dashed Friday when the court upheld the tax code.

“280E continues to negatively impact the growth of the legal cannabis industry, the jobs that it has created and state/local tax revenue that have come as a result,” the company said in a statement.

“Harborside therefore remains committed to pursuing the elimination of this impediment and will continue its efforts through the courts and Congress.”

Harborside attorney Henry Wykowski, who tried the case in 2016, called the decision disappointing but said the fight’s not finished.

“I don’t see this as ‘the war is over,'” he said. “I see this as an important battle in the war.”

Wykowski stopped short of predicting an appeal, saying it will likely take several months before the case is fully resolved.

Only at that point will a decision be made on a possible appeal, he said.

First, he noted, the Tax Court judge must rule on a question of tax-related penalties for Harborside, given that several years worth of federal taxes were in question.

Wykowski also said the STATES (Strengthening the Tenth Amendment Through Entrusting States) Act, a bill that could see success next year in Congress and remove 280E as a cannabis industry hurdle going forward, may not prove a complete solution because it wouldn’t be retroactive for state-legal companies such as Harborside that have been paying hefty federal taxes for years under 280E.

The San Francisco-based attorney said he won’t be satisfied until he gets a victory that refunds millions of dollars he considers unjustly paid to the IRS under 280E, and he believes Friday’s ruling leaves open more than one avenue for an appeal.

“I can’t tell you what Harborside is going to do, but I’m not going to stop,” Wykowski said. “It’s not my habit to stop until I win.”

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3 comments on “280E still applies to marijuana companies, US Tax Court rules
  1. Made In The USA on

    These drug dealers have more money than Washington DC politicians … So let them give those greedy politicians some more cash !

  2. Keith Butler on

    Do you have any idea who you are talking about? “These Drug Dealers” Harborside and it’s Founder Steve DeAngelo are the very definition of Brave Patriotic Americans. Its easy to make blanket statements like you have done but the truth is much more important. There are literally millions of people who owe a great deal of debt to Steve DeAngelo and Harborside. If it wasn’t for Steve, his friends and their tireless, selfless, brave hard work no one would have access to medical Cannabis at all. It is the brave ones like Steve who we all owe a debt of gratitude to. Wake up dude, you are on the wrong side of history. Hopefully you won’t need the great Meds we make as a result of Steve’s sacrifices and if you do, would you be willing to pay 5 times the price in taxes? That’s what they charge Steve, why don’t you try paying your taxes with no allowable deductions and tell me how fair that is.. Get a Grip dude, say you are mistaken, the policies need to be fixed. And BTW, he is paying the bill for the whole industry to benefit and that includes you dude..

  3. Wes on

    Judge-mental, naive, angry, under or misinformed … so on and so forth.
    That’s what I get when I read such comments that are sadly agreed upon by many ….

    So sad
    With the infinite amount of information out there and yet still people say such big words with having such little information about a subject.

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