US Supreme Court declines to hear cannabis tax case

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The U.S. Supreme Court took a pass on a cannabis business tax case, marking another legal defeat for industry advocates attempting to overturn the onerous Section 280E of the federal tax code.

According to Law360, the justices decided not to hear any arguments in an appeal from Eric Speidell, owner of Colorado-based The Green Solution.

Speidell and his industry allies had attempted to argue – but lost at the 10th Circuit Court of Appeals – that the IRS lacked the authority to request state information as part of investigations into alleged federal tax crimes.

The move was an attempt to limit the IRS’ power under Section 280E, but that legal avenue appears now to have closed for good.

Speidell and a few other marijuana companies have been attempting to resist years-old summonses issued to them by the IRS, Law360 reported, but their legal arguments have been rebutted by the courts at every turn.

Speidell requested in March that the United States’ highest court rule that the Supremacy Clause in the U.S. Constitution essentially overrides 280E and wouldn’t prohibit businesses such as The Green Solution from claiming standard business tax deductions.

In May, the Biden Administration, in a legal brief, reiterated its support for 280E, which prohibits standard business deductions for any company that traffics in Schedule 1 or 2 controlled substances.

Speidell’s attorney, James Thorburn, told Law360 that the pass by the Supreme Court was “disappointing.”

“We have to accept that we just lost one of our most basic freedoms,” Thorburn said.