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(NPR)   Legal pot sellers realize they have to pay taxes to the government for their drugs, realize they can't afford it   (npr.org) divider line 165
    More: Spiffy, federal income tax rates, income taxes  
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14358 clicks; posted to Main » on 03 Apr 2013 at 2:56 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-04-02 09:00:38 PM
 
2013-04-02 10:46:18 PM

feckingmorons: There are no legal marijuana sellers, it is against federal law.


Which has nothing to do with whether they are required to pay taxes on their income. James v. United States says they are required to do so. Well, it says embezzlers are required to do so. And if embezzled money is considered gross income, then profits from medical marijuana damn sure count.
 
2013-04-02 10:51:03 PM

skinnycatullus: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which has nothing to do with whether they are required to pay taxes on their income. James v. United States says they are required to do so. Well, it says embezzlers are required to do so. And if embezzled money is considered gross income, then profits from medical marijuana damn sure count.


Yes, that is quite true, but they all said they are doing things legally. No, they're not they are engaged in a federal crime for profit. If they don't pay taxes on that profit it would be another federal crime.

Had they not insisted they were above board I wouldn't have pointed it out, but even the headline on NPR about legal pot sellers is simply absurd. Selling pot is always illegal under federal law.

Personally I think it is absurd that it is a federal crime, but then again I don't use marijuana so I don't really give a crap. If they DOJ has decided they won't prosecute the cases just ask the legislators to change the federal law.
 
2013-04-02 11:45:01 PM

skinnycatullus: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which has nothing to do with whether they are required to pay taxes on their income. James v. United States says they are required to do so. Well, it says embezzlers are required to do so. And if embezzled money is considered gross income, then profits from medical marijuana damn sure count.


According to tfa, the sellers have gotten inconsistent decisions from the tax courts. So it isn't quite as simple as all that.
 
2013-04-03 12:27:19 AM

feckingmorons: There are no legal marijuana sellers, it is against federal law.


Which is a biatch to state law. It's in the freakin' amendments.
 
2013-04-03 01:31:38 AM

feckingmorons: There are no legal marijuana sellers, it is against federal law.


The feds don't get to regulate purely in-state commerce

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.

A lot of potheads are libertarians so, uh, no.
 
2013-04-03 01:36:44 AM

skinnycatullus: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which has nothing to do with whether they are required to pay taxes on their income. James v. United States says they are required to do so. Well, it says embezzlers are required to do so. And if embezzled money is considered gross income, then profits from medical marijuana damn sure count.


Correct.  All income has to be reported.

Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.

http://www.irs.gov/publications/p17/ch12.html
 
2013-04-03 02:17:05 AM
These aren't average taxes levied against other businesses. It's not like they are trying to avoid paying their fair dues. But yay big gov't, shut down some money makers, nobody ever smoked pot before medical or legal weed. Cut yourself out of the take all you want, idiots.
 
2013-04-03 02:33:18 AM
Nice use of the Spiffy tag
 
2013-04-03 02:38:07 AM
Every time this comes up I wonder how many of the people complaining about the taxation are the same people who a few years ago were saying "Legalize it and tax the hell out of it". There is always a catch with things like this.
 
2013-04-03 02:41:05 AM

doglover: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which is a biatch to state law. It's in the freakin' amendments.


STATES RIGHTS!*

*except when I don't agree with state laws
 
2013-04-03 02:59:57 AM
...and thus cannibis should b outlawed and destroyed in all forms at all levels of government forever. The end.

/Well, that was easy. Who wants coffee?
 
2013-04-03 03:01:58 AM
After all, that's how they got Al Capone, isn't it?

Its been a while since I saw  The Untouchables,so I might be wrong.  The Fed is really good at sitting back and catching people on loopholes.
 
2013-04-03 03:03:26 AM
maybe Fed should just cut to the chase and have their own dispensaries. there has to be some sort of end goal somewhere.
 
2013-04-03 03:06:33 AM

KrispyKritter: maybe Fed should just cut to the chase and have their own dispensaries. there has to be some sort of end goal somewhere.


My guess of an end goal is Phillip Morris selling Marley brand spliffs.

/I will gladly take my wizard hat when this happens.
 
2013-04-03 03:07:14 AM

Lsherm: doglover: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which is a biatch to state law. It's in the freakin' amendments.

STATES RIGHTS!*

*except when I don't agree with state laws


I never agree with federal laws over state laws except where specified by the constitution.
 
2013-04-03 03:12:27 AM
"It punishes the dispensary owners who are trying to comply with the law and rewards those that ignore their obligation to file tax returns," he says.

That'll change pretty quickly.
 
2013-04-03 03:12:30 AM

KrispyKritter: maybe Fed should just cut to the chase and have their own dispensaries. there has to be some sort of end goal somewhere.


Think of the very worst horror story you've ever heard about a Pennsylvania liquor store and scale that up to cover fifty states.

It would be an order of magnitude even more disgusting.
 
2013-04-03 03:20:41 AM

2wolves: Think of the very worst horror story you've ever heard about a Pennsylvania liquor store and scale that up to cover fifty states.


Heh, pot laws in Utah will be interesting.
 
2013-04-03 03:20:44 AM
FTA:  Medical or recreational marijuana use is now legal in one-third of all states.

Having a medical marijuana card is like having god as your BFF.
 
2013-04-03 03:20:44 AM

feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.


Actually there is, theres a handful of people who get medical marijuana from the federal government.
 
2013-04-03 03:24:19 AM

doglover: Lsherm: doglover: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which is a biatch to state law. It's in the freakin' amendments.

STATES RIGHTS!*

*except when I don't agree with state laws

I never agree with federal laws over state laws except where specified by the constitution.


Cute.  Which constitution?
 
2013-04-03 03:28:35 AM

doglover: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which is a biatch to state law. It's in the freakin' amendments.


Like the 14th? Or then there's the Supremacy clause...

The thing I don't get is why the government gets to decide that there's no legitimate medical use for it. Doctors disagree. But apparently, morphine is still A-OK.
 
2013-04-03 03:31:25 AM

Cyno01: feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.

Actually there is, theres a handful of people who get medical marijuana from the federal government.


Interesting article, especially the fact that some of the patients are getting 9 ounces a month. Just guessing it's not dirt weed, so at 2+ ounces a week, the compassion must be good, real good.
 
2013-04-03 03:43:50 AM
My pot dealer clears $200k a year from me and his 6 or 7 other customers. Grows it himself, very limited client base.

Good times.
 
2013-04-03 03:44:35 AM

feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.


Strictly speaking, the Feds have no legal authority over pot that does not cross state lines.  Yeah, I know, good luck with that.  But that's the positive side of state rights if the Feds hadn't gutted that part of the Constitution.

Also, I'm laughing at the pot heads crying over the extra taxes.  Now you know how I feel when it comes to alcohol, tobacco, and firearms.
 
2013-04-03 03:44:41 AM
Plead the fifth amendment on your income taxes. Duh.
 
2013-04-03 03:44:56 AM

Bucky Katt: feckingmorons: There are no legal marijuana sellers, it is against federal law.

The feds don't get to regulate purely in-state commerce


They do when the buying and selling of said merchandise violates federal law.

doglover: I never agree with federal laws over state laws except where specified by the constitution.


Why should people have different rights based on which state they live in?

Point02GPA: FTA: Medical or recreational marijuana use is now legal in one-third of all states.


No it's not. This just means that local and state cops can't arrest you. The feds can still go after you if they want, as it is still a federal crime.
 
2013-04-03 03:52:24 AM
You gotta pay taxes? What's up with that? That's messed up. That's Kafkaesque.
 
2013-04-03 03:55:10 AM

Rip Dashrock: Cyno01: feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.

Actually there is, theres a handful of people who get medical marijuana from the federal government.

Interesting article, especially the fact that some of the patients are getting 9 ounces a month. Just guessing it's not dirt weed, so at 2+ ounces a week, the compassion must be good, real good.


From what I've seen it's nothing compared to the stuff you see at dispensaries.  Think 'mids' or 'mersh'.
 
2013-04-03 04:00:07 AM
This really isn't about not paying taxes.  It's about not allowing cannabis businesses to take ordinary business deductions for ordinary business expenses.  It's about being 'double' taxed.
 
2013-04-03 04:03:36 AM

robohobo: My pot dealer clears $200k a year from me and his 6 or 7 other customers. Grows it himself, very limited client base.

Good times.


It must be nice to have $28,000 to spend on pot every year.
 
2013-04-03 04:11:34 AM

feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.


It doesn't actually matter whether it exists/is legal under federal law if the feds don't have jurisdiction, which is the claim made by all the states that have legalized it.  That's sort of like pointing out that insulting government officials is illegal in Russia-- since they have no authority over US media, that doesn't actually matter.

The feds do have the authority to levy taxes on income, though.

Sgygus: This really isn't about not paying taxes.  It's about not allowing cannabis businesses to take ordinary business deductions for ordinary business expenses.  It's about being 'double' taxed.


What do you mean?  Most standard business deductions (equipment depreciation, annuitization of capital investments, etc) apply as normal.  Since their contention is that they're out of federal commerce jurisdiction, they wouldn't be allowed to apply for agricultural subsidies, but basically everything else is as-normal.  It'll only come up if you get audited... again, as normal.

The fact that you're growing weed doesn't change the fact that you're running a business.  I'd expect about 3/4 of dispensaries to go out of business within two years just based on the fact that they're small businesses and the people running small businesses are notorious for sucking at it, no conspiracy required.
 
2013-04-03 04:15:30 AM
My father died the year before I was born from a Mari Juana overdose. we work are woreking at teh grocery store on 132nd street IT'S FULL OF OLD PEOPAL WHO REEK OF TEH ROTTEING STENTCH OF DEATH!!! Evary tiem I coem home from wrok I haev to take 20 showears just to erase my memmories of pain. BUT THEY NEVAR FADE FROM MY SKULL! 110100100 110100100 110100100
 
2013-04-03 04:16:34 AM
The feds actually made a rule saying illegal drug traffickers have to pay a higher rate of taxes on income?
That seems really odd and pointless.  Oh, yep.  The Government did it.
 
2013-04-03 04:18:06 AM
Just like anything, when (effected) critical mass is met, people will start making a new avatar to swap out on FB and rally behind it.  I for one can't wait until enough people are arrested and detained indefinitely for no good reason, along with the rest of the bs that's been going on the past several years.
 
2013-04-03 04:18:24 AM

SpaceBison: robohobo: My pot dealer clears $200k a year from me and his 6 or 7 other customers. Grows it himself, very limited client base.

Good times.

It must be nice to have $28,000 to spend on pot every year.


I smoke a lot of pot; One of his guys is like a fourth of his business, but he smokes out all his friends. My cut is just me and my wife when she's not on call.
 
2013-04-03 04:21:50 AM

Jim_Callahan: feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.

It doesn't actually matter whether it exists/is legal under federal law if the feds don't have jurisdiction, which is the claim made by all the states that have legalized it.  That's sort of like pointing out that insulting government officials is illegal in Russia-- since they have no authority over US media, that doesn't actually matter.

The feds do have the authority to levy taxes on income, though.

Sgygus: This really isn't about not paying taxes.  It's about not allowing cannabis businesses to take ordinary business deductions for ordinary business expenses.  It's about being 'double' taxed.

What do you mean?  Most standard business deductions (equipment depreciation, annuitization of capital investments, etc) apply as normal.  Since their contention is that they're out of federal commerce jurisdiction, they wouldn't be allowed to apply for agricultural subsidies, but basically everything else is as-normal.  It'll only come up if you get audited... again, as normal.

The fact that you're growing weed doesn't change the fact that you're running a business.  I'd expect about 3/4 of dispensaries to go out of business within two years just based on the fact that they're small businesses and the people running small businesses are notorious for sucking at it, no conspiracy required.


They will go out of business cause it's called WEED because it requires virtually no resources for even a moderately intelligent person to produce a virtually infinite supply in a 16 square foot closet and only 5+00p1¦) 114¦\/¦45 would pay more for cheebah than they would for hydroponic tomatoes per elbow
 
2013-04-03 04:22:40 AM
The "tax revenue" argument was used as a club for years to beat people over the head with.

They had damn well better be paying the taxes. This is about the third or fourth time this subject has come up that I'm aware of and we aren't even at the six month mark.

This is perhaps the one group of people whom I believe should be absolutely terrified of what will happen to their lives if they fail to pay taxes. I sincerely hope the IRS... an organization I hate because its above the law... has a field day with these people and if you support marijuana legalization you should perhaps feel the same way because exactly how many seconds after one major tax evasion case goes to court do you think to have the anti-marijuana crowd beating that point home to every voting age person and legislator in the country?

You can't afford set backs. PAY THE DAMN TAXES.
 
2013-04-03 04:23:01 AM

Jim_Callahan: Most standard business deductions (equipment depreciation, annuitization of capital investments, etc) apply as normal.


"If they were in a normal business, their top bracket would be about 45 percent. But if you have to pay tax on your gross profit and not your net income, the calculations I've done puts the federal and state income tax at about 70 percent"

tfa disagrees with you, Jim.
 
2013-04-03 04:25:37 AM

Abacus9: doglover: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which is a biatch to state law. It's in the freakin' amendments.

Like the 14th? Or then there's the Supremacy clause...

The thing I don't get is why the government gets to decide that there's no legitimate medical use for it. Doctors disagree. But apparently, morphine is still A-OK.


Schedule 1 is made up. Everything has legitimate uses, even if it's not ideal or has a crazy low LD50
 
2013-04-03 04:27:11 AM
I don't know how Americans get things done.  In NZ yeah we have three layers of government (city council, regional council, and Parliament) but city and regional councils don't have anything to do with criminal or tax law.  They do building and resource consent, some district planning, zoning, bus service... that kind of pissant but important local stuff.

It's absolutely mind-buggering that you can have two layers of government with different laws on the same thing.  Having lived in a few countries but never under the particular system of crazy that is federalism, it makes no sense to me for a State to have the power to have their own criminal law that contradicts or conflicts with Federal laws, and for a crime committed at "state" level to have a different punishment than "federal" level usually because of some minor technicality.

That your criminal law and tax laws can be in conflict like this should tell you there is something very wrong with the way the country operates.  But I'm guessing you'd probably have to try and change the archaic and cumbersome Constitution which is apparently on a level with changing the Bible so it won't be happening until after the country has undergone some sort of total collapse.

/And all the "states rights" crazies would come out of the woodwork
//Would probably end in another civil war if you tried
 
2013-04-03 04:29:36 AM

doglover: Abacus9: doglover: feckingmorons: There are no legal marijuana sellers, it is against federal law.

Which is a biatch to state law. It's in the freakin' amendments.

Like the 14th? Or then there's the Supremacy clause...

The thing I don't get is why the government gets to decide that there's no legitimate medical use for it. Doctors disagree. But apparently, morphine is still A-OK.

Schedule 1 is made up. Everything has legitimate uses, even if it's not ideal or has a crazy low LD50


i.imgur.com
 
2013-04-03 04:33:01 AM

Jim_Callahan: Most standard business deductions (equipment depreciation, annuitization of capital investments, etc) apply as normal. Since their contention is that they're out of federal commerce jurisdiction, they wouldn't be allowed to apply for agricultural subsidies, but basically everything else is as-normal. It'll only come up if you get audited... again, as normal.


Internal Revenue Code section 280E specifically denies a deduction or credit for any expense in a business consisting of trafficking in illegal drugs "prohibited by Federal law or the law of any State in which such trade or business is conducted."[

The IRS' position is that all MJ business is illegal business.  Nothing is deductible, gross profit = gross revenue.
 
2013-04-03 04:33:44 AM
Marijuana is down to $100 an ounce where it's legal. If you think there's a lot of money to be made at $100 an ounce by the time you get done with your electricity bill water bill nutrient Bill trimmer Bill retail bill ad bill lawyer fees etc. you're kidding yourselves.
 
2013-04-03 04:34:02 AM

ransack.: They will go out of business cause it's called WEED


What I like to vape is called butane-extracted peanut-butter hash and it's why dispensaries will not go out of business.
 
2013-04-03 04:36:35 AM
not a lawyer but.......
http://www.ndsn.org/nov96/drugtax.html">http://www.ndsn.org/nov96/dr ugtax.html
Drug Taxes and Prosecution Are Double Jeopardy, Says Texas High Court IN THE COURTS
November 1996
On October 16, the Texas Court of Criminal Appeals ruled in a 5-4 decision that prosecuting drug dealers and imposing punitive taxes on their confiscated drugs violates the constitutional ban against double jeopardy (Mark Stennett v. State (Texas), 1996WL591108, (October 16, 1996); UPI, "Court rules against illegal-drug tax," <D­RCtalk­[nospam-﹫-backwards]ten­cr­d*o­r­g>, October 16, 1996; Kathy Walt, "It's time or taxes for drug dealers," Houston Chronicle, October 17, 1996, p. 21A; Christy Hoppe, "Combining drug taxes, prosecution ruled improper,"

also noted is the using of taxes as punitive (so high as to be unreasonable)

in that case as well the defendant paid (a portion of taxes) which stopped the state from prosecuting (cant do both)

whether that applies here -    dont know    - just happy to help stir things a bit
 
2013-04-03 04:44:21 AM

feckingmorons: There are no legal marijuana sellers, it is against federal law.

"Regardless of state laws to the contrary, there is no such thing as "medical" marijuana under Federal law. Marijuana continues to be a Schedule I substance meaning that it has no currently accepted medical use and a high potential for abuse."

Odd, people complaining about confiscatory taxes, I thought the pot heads liked more taxes.


That tends to be the argument made by those who say to leave gay marriage and healthcare up to the states using the states rights theory.

Why should cannabis be any different?
 
2013-04-03 04:44:30 AM

Abacus9: Bucky Katt: feckingmorons: There are no legal marijuana sellers, it is against federal law.

The feds don't get to regulate purely in-state commerce

They do when the buying and selling of said merchandise violates federal law.

doglover: I never agree with federal laws over state laws except where specified by the constitution.

Why should people have different rights based on which state they live in?

Point02GPA: FTA: Medical or recreational marijuana use is now legal in one-third of all states.

No it's not. This just means that local and state cops can't arrest you. The feds can still go after you if they want, as it is still a federal crime.


And they get to do it on their dime, without any aide whatsoever from the locals. That means no local backup on arrests, no local cells for holding, no surveillance or use of digital infrastructure for paperwork, nothing.

Basically, if it isn't within a square mile of the field office it is literally too expensive to go after. That's the beauty of how CO pulled it off. They basically yanked the rug right out from under the feds. If you're north of Colfax, south of 6th, west of I-25 or east of Monaco, you're quite literally too far away for the DEA to afford going after. Not having the locals' support in tying up cases turns out to be damn near crippling to a federal agency's field offices.

They took the Republican mantra of "Starve the beast" and shoved it right up their doughy asses. I miss my home state sometimes.
 
2013-04-03 04:44:48 AM

Bucky Katt: feckingmorons: There are no legal marijuana sellers, it is against federal law.

The feds don't get to regulate purely in-state commerce


You hit this (the federal vs. state law argument) on the nose.  The FDA has no authority when it comes to legalized marijuana.

With that said, the federal government it notorious for expanding their authority however they can... So yeah, tax law...
 
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