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Monday, February 24, 2014

Bible-Thumping Marijuana Dispensary Challenges IRS

Posted By on Mon, Feb 24, 2014 at 2:20 PM

This could get complicated
  • This could get complicated

God is involved in the latest spat between the federal government and California's medical marijuana industry.

And, perhaps for once, the big guy (or girl) upstairs is on marijuana's side.

Canna Care, the Sacramento-area dispensary run by evangelical Christians, is challenging the Internal Revenue Service over a nearly-$1 million bill for back taxes, the Sacramento Bee reported today.

The dispensary is neither the first nor the last to challenge the IRS's denial of business expenses claimed on tax returns under a Reagan-era law written to punish cocaine and methamphetamine dealers. But it may be the first to haul the Bibles it dispenses along with buds into court.

For years, dispensaries have been dealing with large tax bills levied by the IRS. Under a tax code section (280E), pot stores are not allowed to deduct certain business expenses from their taxes.

That is to say, marijuana retail outlets can deduct the cost of marijuana from their federal income tax return -- thanks to a 2007 case of a San Francisco-based dispensary, CHAMP (Cannabis Helping Alleviate Medical Problems) -- but not anything else.

Rent, medical insurance, workman's comp, you name it, is "out." Cannabis, which is federally illegal is "in."

Fair enough.

In Canna Care's case, the dispensary clears about $2 million a year in cannabis sales -- the prayer meetings, religious outreach and radio and television ads are extra.The penalty now stands at $873,167 for taxes owed from 2006 to 2008, the Bee reported.

The IRS offered the dispensary a "break": $100,000 to settle the entire debt. But operators Lanette and Bryan Davies refused, calling the settlement offer, in essence, a shakedown for protection money that other business owners don't have to pay.

They'll be in federal court in San Francisco tomorrow, with God on their side. We'll see what influence He has on a federal judge.

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About The Author

Chris Roberts

Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.


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