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[justpics]

You can't file income taxes any way because its illegal and you certainly wouldn't be able to declare the cost of purchasing product.

you don't have to label product purchased and sold on your taxes as "marijuana", and the even if you did, the IRS can only give that info to the DEA through specific federal subpoenas if my memory serves correct. Suffice to say, that even if your "retail sales" were cocaine, you'd have to declare (non specifically) those sales and pay taxes on it, legal or not. Just cause your business might be illegal doesn't mean you don't have to pay taxes on it. Fucked up? yes, but that is the law.

at least that's what ive been told when I ask real lawyers about this stuff.

AFAIK, the reason most dealers get away without paying taxes is because they don't bring in enough cash to raise suspicion, and since they deal with only cash sales, they'd have to bring in a lot for the government to take notice and or prove anything.

[hiamps]

Yep that seems to be the case, here is the responce from dept. of rev...

"Mr. ******,



The Department of Revenue has no jurisdiction over whether or not medical marijuana dispensaries are legal. Therefore, we cannot help you with this aspect.



However, whether or not such dispensaries are legal, their sales of marijuana are subject to sales tax and retailing
B&O tax. Dispensaries making such sales must be registered with the Department of Revenue and report/remit the taxes due on such sales.

[WashougalWonder]

*shaking head, half smile on face*

LOL, Danged if you do, Danged if you don't.

I guess I will contact my local state legislators. This is stupid. I don't mind paying taxes...well I wouldn't ..... but this cannot be....the State by taxing something they say is illegal, constitutes that the state itself is violating Federal Law. Hmmmmm.

Actually folks this could be a very important tool in the fight to legalize. A State taxing it? I think it is awesome idea, but lets be functional here.

I sent this

First let's get a couple items out of the way. I am medical Cannabis patient. Fortunately I don't have to use dispensaries....although there are none close to my area anyway.

Second. I think to tax cannabis is great, no problem. At least with the tax itself.

Big problem with the fact that the State says that dispensaries are illegal and now they want to tax them. This in itself (dispensaries) is a whole topic, which I will not digress to. What I perceive as a citizen, is that the government is calling the kettle black. How can something illegal be taxed? Is the State in itself now violating Federal laws by taxing. Additionally, the State, even though on their website stating dispensaries are illegal, seems to condone illegal activity by taxing it, sort of like profiteering off of an illegal activity. Many of the lay public view this as oxymoronic and quite possibly illegal in itself.

Another issue pointed out in the mess is that by State law, medicine is not taxable....yet medical cannabis is now considered taxable. Totally against what I understood the State laws to state.

Do you see the complicated mess this creates?

As a legal cannabis patient, I live in a gray area, fearing constantly that the Feds might show at my door for a couple of plants that allow me to carry on a half-way normal life, even though I am unable to work. I realize I have to allow the police into my home any time they want to inspect, I have lost a bunch of my civil rights with that one.

Also one last item, if the State licenses all the dispensaries and the taxation stuff, it essentially puts a huge target on the back of the dispensary such that the Feds can track each and every one and dissipate the law on what seems like any given whim on who gets legal action taken against them.

If dispensaries were legal, I could become a functional member of society again (medically disabled, almost 60, and white male) contributing taxes, social security, and providing for the needs of the community at the same time. It also puts the individual in a position of 1. not filing federal tax and breaking the law; 2. filing federal tax and getting arrested; 3. sorta lying trying to fulfill this oxymoronic approach and getting caught anyway

In Summary, as I do get off the path now and then. How can the State tax something that is Federally illegal and State illegal without becoming criminal themselves. The State is coming across to the general public as a bureaucratic mumbo-jumbo.

Do any of you think this could be discussed at the legislative level such that us poor little guy that just wants to live with a very debilitating condition have some solid guidelines how to go about all this? The way things stand currently is nonsense.

Will let you know of responses.
EDIT: That went to my 3 legislators.

[gypski]

Well put. We all know who screwed up the situation, and it ain't us! :thumbsup:

*shaking head, half smile on face*

LOL, Danged if you do, Danged if you don't.

I guess I will contact my local state legislators. This is stupid. I don't mind paying taxes...well I wouldn't ..... but this cannot be....the State by taxing something they say is illegal, constitutes that the state itself is violating Federal Law. Hmmmmm.

Actually folks this could be a very important tool in the fight to legalize. A State taxing it? I think it is awesome idea, but lets be functional here.

I sent this


Will let you know of responses.
EDIT: That went to my 3 legislators.

[hiamps]

Anyone good at writing? If someone could write a professional letter I would copy it and send it to my legislators and anyone else I can think of. Everyone should flood every email box they can....

[emilya]

Just my 2c on this, but operating a dispensary and working from donations is not selling. Donations have completely different rules in the tax law. I think it may be time to talk to an attorney about forming a non-for-profit corporation to handle the "business" side of this. However, not being a lawyer, I'm not sure of the legalities of forming a charter to preform a business conducting an illegal act. The state may reject your charter on these grounds.

This is just as murky as them trying to tax the profits from an illegal act and looks to be the beginnings of a very interesting fight toward legalization to me. You know that legalization is going to happen because of pressure such as this... not from a president who one day decides that it will be a good idea to make it legal.

Emmie

[emilya]

Anyone good at writing? If someone could write a professional letter I would copy it and send it to my legislators and anyone else I can think of. Everyone should flood every email box they can....

It has been my experience that these people do not really listen to letter writing or phone in campaigns. It is the legal system that scares them. I bet there is some hot shot tax lawyer out there who would love to take this on to set a precedent. I think you have just become a test case... and a good one at that. Lets see where this goes!

Emmie

[killerweed420]

So if you run a dispensary like a business and pay your state taxes, wouldn't you then HAVE to file a return? If you file a return then the Feds would step in...Seems the State is wanting to get the Feds involved. But how will that help the State make money?

You could and legally should file an income tax statement for the business. And like whats been stated here you don't have to disclose on your tax form what your selling. The problem is you can't really show a receipt for products purchased because federally its illegal. So you have to be good at creative bookkeeping to keep your profits down. And all this is assuming that at some date you maybe audited by the IRS.

[gypski]

Just my 2c on this, but operating a dispensary and working from donations is not selling. Donations have completely different rules in the tax law. I think it may be time to talk to an attorney about forming a non-for-profit corporation to handle the "business" side of this. However, not being a lawyer, I'm not sure of the legalities of forming a charter to preform a business conducting an illegal act. The state may reject your charter on these grounds.

This is just as murky as them trying to tax the profits from an illegal act and looks to be the beginnings of a very interesting fight toward legalization to me. You know that legalization is going to happen because of pressure such as this... not from a president who one day decides that it will be a good idea to make it legal.

Emmie

I have an inactive non-profit that I started with another mmj patient a couple of years back. Because they did some things with money I borrowed to acquire medicine to provide to patients, and they asked people I didn't know if they would start growing for it, the relationship was severed. I have the corporation documents still in my possession, and can use it to log on to the account in the sec of state web site. I could reactivate it for $10.00 but won't at this point in time. That said, when I filed and wrote up the non-profit corporation, I said our intent was to provide a non-prescription medication to a special class of medical patients. So, it is possible as most have the same type of non-profit status, and I'm sure most or many do if they are smart.

[hiamps]

It has been my experience that these people do not really listen to letter writing or phone in campaigns. It is the legal system that scares them. I bet there is some hot shot tax lawyer out there who would love to take this on to set a precedent. I think you have just become a test case... and a good one at that. Lets see where this goes!

Emmie

Not me, have too much to lose, just trying to help a freind. Looks as tho he is going forward, myself I would wait untill the greyness clears a bit. Will let you know if he does.