Bill Overview
Title: To amend the Internal Revenue Code of 1986 to allow deductions and credits relating to expenditures in connection with marijuana sales conducted in compliance with State law.
Description: This bill exempts a trade or business that conducts marijuana sales in compliance with state law from a provision in the Internal Revenue Code that prohibits business-related tax credits or deductions for expenditures in connection with trafficking in controlled substances.
Sponsors: Rep. Mace, Nancy [R-SC-1]
Target Audience
Population: People involved in the legal marijuana industry
Estimated Size: 5000000
- There are currently 38 states in the U.S. which have legalized some form of marijuana use, either medicinal or recreational.
- Businesses involved in the marijuana industry in these states will be directly affected by this bill as it pertains to their tax obligations.
- This includes cultivators, manufacturers, dispensaries, and delivery services which conduct sales in accordance with state laws.
- A significant portion of these businesses are small to medium-sized enterprises.
- Additionally, employees of these businesses will indirectly benefit from potentially increased revenues and business growth.
Reasoning
- The U.S. marijuana industry is immersive and includes a vast number of roles that span from cultivation to sales. This policy could influence various demographics differently depending on their role and location within the industry.
- Businesses already operating under state laws with legalized marijuana sales are the primary beneficiaries. They can achieve tax savings which might be reinvested into their operations, simulating growth, stability, or increased workforce.
- Employees of these businesses might see indirect benefits through job security or potential wage increases as a result of business profitability increase.
- Not everyone in the industry will be affected equally; those in states with harsher marijuana regulations or smaller businesses might see lower impacts.
- This policy will not dramatically affect individuals outside the marijuana industry unless indirectly through broader economic improvements.
Simulated Interviews
Dispensary Owner (Denver, CO)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 4/20
Statement of Opinion:
- I think this policy could really help us expand. With tax relief, I'd have more budget to reinvest and hire more staff.
- It feels like a step towards normalizing marijuana as a legitimate business, which is encouraging.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
marijuana Marketing Coordinator (Los Angeles, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- Great to see some progress, but I wonder if it will directly impact my role aside from maybe job security.
- If the company thrives, I might see a promotion or raise, eventually.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
marijuana Cultivator (Seattle, WA)
Age: 47 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- Tax deductions can really help us manage costs, considering how tight our margins are right now.
- This might finally give cultivators a break and allow for better growth opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
marijuana Legal Advisor (Portland, OR)
Age: 34 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- This change makes my job interesting, as I help clients navigate new tax benefits.
- While I may not be directly impacted monetarily, the policy opens more avenues for advising.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Barista (Chicago, IL)
Age: 23 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 15/20
Statement of Opinion:
- I don't think this will affect my life much, maybe some people around here will have more spending money.
- I guess the cafes might see slightly more business if their customers have more to spend.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Accountant (Boston, MA)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Good move. It'll simplify tax logistics for clients and increase the growth potential of those businesses.
- I'd expect a more streamlined approach to managing finances with definite tax benefits.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired Educator (San Francisco, CA)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I think every piece that helps normalize and legislate properly can make societal impacts.
- Living so close to these businesses, this could shape local community funding from taxes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
marijuana Retail Manager (Phoenix, AZ)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- A welcome relief! The reduced tax burden means we have more leverage over pricing and development.
- I'm optimistic about adding new locations now which was uncertain before.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Budtender (Las Vegas, NV)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- Hopefully, it leads to pay raises if our store does well. More disposable income for customers would be nice too.
- Job security is always nice to have, and this policy might help.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
City Council Member (Reno, NV)
Age: 64 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- Policies like these can bolster local economies, ensuring that businesses keep more of their profits for growth.
- This could create a ripple effect for increased community investments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $980000000 (Low: $800000000, High: $1200000000)
Year 2: $1020000000 (Low: $850000000, High: $1250000000)
Year 3: $1060000000 (Low: $900000000, High: $1300000000)
Year 5: $1120000000 (Low: $950000000, High: $1380000000)
Year 10: $1250000000 (Low: $1100000000, High: $1500000000)
Year 100: $1800000000 (Low: $1600000000, High: $2000000000)
Key Considerations
- While the immediate impact will be a reduction in tax revenue, the long-term industry growth and additional taxes from expansion might offset losses.
- Ensuring compliance with state law is central to the legitimacy of the deductions.