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Farm CPA Report

Bill to Disallow Deductions for Marijuana Businesses is Introduced

Two Senators introduced a bill to disallow deductions even if marijuana is made legal

Paul Neiffer's avatar
Paul Neiffer
Feb 12, 2025
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Two Republican Senators introduced a bill to prohibit most tax deductions for any marijuana business even if it is finally made legal at the federal level. Senators James Lankford (R-OK) and Pete Ricketts (R-NE) introduced Bill S. 471 earlier this month.

It is a short bill. It simply states that these businesses can’t deduct expenses related to marijuana sales. Under current Code Section 280E, a marijuana business is only allowed to deduct cost of goods sold.

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