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IS THERE A BUSINESS CODE NUMBER FOR MEDICAL MARIJUANA GROWING?

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I AM DOING THIS BUSINESS IN MAINE WHICH ALLOWS
THE BUSINESS TO EXIST. I WANT TO REPORT EXCESS INCOME
OVER EXPENSES ON SCHEDULE C AS A VALID BUSINESS AND PAY
ss TAX AS WELL AS FEDERAL INCOME TAX.
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4 Replies 4
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Level 8

I don't think there are any 'valid' expenses for this type of business. Marijuana sales...although legal in your state.. are still illegal in the US. Thus.... there are no deductible expenses for an illegal income.  even more thus.. the gross income is net income also.

Generally, businesses can deduct ordinary and necessary business expenses under I.R.C. §162. This includes wages, rent, supplies, etc. However, in 1982 Congress added I.R.C. §280E. Under I.R.C. §280E, taxpayers cannot deduct any amount for a trade or business where the trade or business consists of trafficking in controlled substances…which is prohibited by Federal law. Cannabis, including medical marijuana, is a controlled substance. What this means is that dispensaries and other businesses trafficking in cannabis have to report all of their income and cannot deduct rent, wages, and other expenses, making their marginal tax rate substantially higher than most other businesses.

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Level 15
Level 15

Business code for it is here.

https://www.naics.com/code-search/?naicstrms=marijuana

I believe only Cost of Goods Sold is deductible in the marijuana industry.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 15

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Cheers!

HINT: https://ttlc.intuit.com/community/business-taxes/discussion/i-m-a-state-registered-marijuana-grower-...


ex-AllStar
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Level 3

Yes, its a new code, and can be found on the list. Your best solution is go to the instructions of Schedule C, and look for the section of business codes. Be sure you look it up in the 2019 instructions.

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