Legal pot dealers in Colorado face woes during tax season

Lindsay Jolivet
Daily Buzz

Licensed medical pot dealers in Colorado might be wishing they lived in a state where their trade was still illegal right now, because it might be less complicated to avoid the police than to file their taxes.

Medical marijuana has been legal for more than a decade in the state, according to the Department of Public Health and Environment. In Nov. 2012, the state voted in a referendum to legalize limited recreational marijuana use.

Even so, medical dispensaries are facing a familiar headache this month — a headache known as income tax.

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The woes of drug dealers continue, according to National Public Radio, because of a mess of tax code that's hazier than the cloud of smoke their customers produce.

The law can leave sellers paying exorbitant taxes on their sales without being able to claim the same deductions as other businesses, the story says.

The public broadcaster reports that income tax on pot sales can reach up to 70 per cent because of a law that was written to stop illegal trafficking. That tax code affects legal, medical sellers too.

The drug dealers say it's unfair to forbid them from behaving like legal businesses.

An accountant for dispensaries told NPR that there's a form on which business owners can claim expenses anyway, telling the US Internal Revenue Service, essentially, that they disagree with the policies.

Meanwhile, policies in general surrounding both medical and recreational marijuana use hang in legal limbo, according to the National Constitution Center blog, because of contradictions between federal and state laws.

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Pot growers, dealers and smokers alike wait for the smoke to clear. What a bummer.