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Cannabis Tax & Business Consulting

Cannabis Taxes?

We’re a CPA & accounting firm that specializes in tax preparation for cannabis businesses. We offer full-service, year-round tax compliance and consulting services to help you navigate the complex world of marijuana taxation. From sales and use taxes to payroll taxes, we can handle all your needs. Our team has decades of experience with state and federal regulations, so you can rest assured knowing your business is in good hands.

Medical and recreational cannabis (marijuana) are fast growing business industry as wide spread acceptance across the country.  We are currently working with medical and recreational marijuana dispensaries, cultivation facilities, infused product facilities and testing laboratories.

We are a pioneer in a bookkeeping and tax model that we recommend for our clients. We also perform the following services for our cannabiz (marijuana) business clients:

  1. Keep accounting data
  2. Prepare weekly and monthly payroll
  3. Prepare federal and state income tax records
  4. Prepare sales and excise
  5. Prepare the financial and accounting policies and procedures
  6. Provide financial advisory services for entrepreneurs from different financial areas

Because of the unique regulatory environment that US Code 280E creates for marijuana companies, owners cannot afford to work with inexperienced and unrecognized tax preparers and accountants.

Cannabis Taxes and Section 280E

Cannabis Taxes-280E background

Marijuana companies income tax returns are governed by US Code 280E. 280E was adopted by the US Congress in 1986 to prevent “illegal drug traffickers” from Schedule I and II substances (Controlled Substances Act) filing a tax return with deductions and sick pay. Marijuana is still listed as a Schedule I substance and the Internal Revenue Service (IRS) actively exports 280E against legal marijuana company owners in all states. The US tax tribunal confirmed the legality of the IRS applying 280E to legal marijuana cases in two important cases, CHAMP & Olive.

How Cannabis Taxes/Section 280E affects you

280E prevents an owner from deducting tax for significant expenses related to sales, such as advertising, budget wages, rental costs, signage and certain improvements. Inventory production costs associated with the cultivation, cultivation or production of an extract or an infused product are permissible tax deductions.

Under Cannabis Taxes and Section 280E, the IRS assesses the tax on gross revenues (sales – production costs) instead of net income (sales – (production costs – administrative costs – sales costs).

The tax strategy is achieved by assessing the functioning of a marijuana plant and allocating the deductible and non-deductible expenses appropriately.  

Contact us for an appointment

You deserve an accountant who understands the unique challenges faced by cannabis businesses – one who will work hard to make sure you get every deduction available under the law while staying compliant with local regulations. That’s what we do at XOA TAX – our goal is always 100% client satisfaction! Call or email us to make an appointment for your cannabis activities.