Robert Celt
New Member
Owners of local medical marijuana businesses face a major hurdle this tax season. They have to file federal income taxes, despite the fact that their company is considered illegal under federal law.
Andre Rhodes has to file taxes for his medical marijuana dispensary, Nevada Wellness Center, which opened for business in October.
Rhodes says he has to meet with a certified public accountant to go over the process.
"Once you get into people explaining the tax code to you and what you can write off and what you can't it really is mind boggling," Rhodes said.
Since medical marijuana is still illegal under federal law, the list of deductions allowed by the Internal Revenue Service is short.
"Most things are not deductible, in credits and deductions are not allowed, except if it's a return of your capital," said Dennis Meservy, a CPA.
Among the short list of deductibles are items including, seeds and grow lights. However, staff salaries and property rent aren't deductible.
"Those are the bigger deductions, so basically you're saying you cant hardly deduct much," Meservy said.
Meservy does not currently have a client who owns a medical pot facility, but he's familiar with the challenges, one of which includes the fact that the business is an all-cash business.
"Filing a return -- I don't think that is as big a deal as maintaining their records and being a part of the cash business on a daily basis," said Meservy.
Most banks are federally regulated, so they're not opening accounts for medical marijuana business owners. Rhodes says he has two ways to keep track of the cash flow including a bookkeeper and a purchase order system.
"You just hand your papers over to your CPA to find out what you owe," Rhodes said.
In Nevada, medical marijuana business owners get a bit of a break from doing business in the state because Nevada doesn't have a state income tax.
News Moderator: Robert Celt 420 MAGAZINE ®
Full Article: MMJ Dispensaries Have To File Taxes Despite Being Illegal Under Federal Law
Author: Karen Castro
Contact: LasVegasNow
Photo Credit: None found
Website: LasVegasNow
Andre Rhodes has to file taxes for his medical marijuana dispensary, Nevada Wellness Center, which opened for business in October.
Rhodes says he has to meet with a certified public accountant to go over the process.
"Once you get into people explaining the tax code to you and what you can write off and what you can't it really is mind boggling," Rhodes said.
Since medical marijuana is still illegal under federal law, the list of deductions allowed by the Internal Revenue Service is short.
"Most things are not deductible, in credits and deductions are not allowed, except if it's a return of your capital," said Dennis Meservy, a CPA.
Among the short list of deductibles are items including, seeds and grow lights. However, staff salaries and property rent aren't deductible.
"Those are the bigger deductions, so basically you're saying you cant hardly deduct much," Meservy said.
Meservy does not currently have a client who owns a medical pot facility, but he's familiar with the challenges, one of which includes the fact that the business is an all-cash business.
"Filing a return -- I don't think that is as big a deal as maintaining their records and being a part of the cash business on a daily basis," said Meservy.
Most banks are federally regulated, so they're not opening accounts for medical marijuana business owners. Rhodes says he has two ways to keep track of the cash flow including a bookkeeper and a purchase order system.
"You just hand your papers over to your CPA to find out what you owe," Rhodes said.
In Nevada, medical marijuana business owners get a bit of a break from doing business in the state because Nevada doesn't have a state income tax.
News Moderator: Robert Celt 420 MAGAZINE ®
Full Article: MMJ Dispensaries Have To File Taxes Despite Being Illegal Under Federal Law
Author: Karen Castro
Contact: LasVegasNow
Photo Credit: None found
Website: LasVegasNow
