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IS 471C A POT TAX FIX, OR A TRAP?

A self-described “very aggressive” accountant recently wrote to me, “We don’t want our clients paying any tax if possible. We know how to use 471c to navigate the unfair implications of 280e.”

WeedWeek isn’t affected by industry-hated tax rule 280E, but our business columnist Dan Mitchell, dug a little deeper into 471C, an obscure loophole some think can normalize the taxes paid by smaller cannabis businesses.

  • The rule, included in the 2018 tax cut, affects how companies reporting less than $25M in revenue can categorize their expenses.
  • Whether cannabis companies can take advantage of it to offset 280E has not been adjudicated in court.
  • Regulatory analyst Sean Hardwick recently wrote that claiming “471C could have ‘dire consequences’ to the marijuana operator.”
    Mr. Cannabis Law