Tax Code Tweaked
The revised tax code is already a step closer to reality last Monday night at a city council meeting. The amendment’s goal is to lessen the regulations for landlords. The council approved the 2nd reading of the revised penal code. The code has not been revised since 1964. The amendment states that landlords are required to report quarterly the names of their tenants. This was suggested by Councilman Sherrie Curtis wherein the landlord must file the report by the time they renew their license or when they have new tenants.
Linda Ziegler, Ohio Avenue resident, added that landlords should only include adults in their tenant reports. Before the ordinance will be adopted, it will still have to undergo one more reading. It will be rediscussed at finance committee meetings at 11 a.m. November 13 and 6 p.m. November 19, before the regular council meeting. The chairman of the committee, Curtis, urges everyone who have comments to attend the meeting on November 13 session.
Ziegler and Brian Kerr, both Ohio Avenue resident, states that the addition of an agreement that gas and oil lease royalties are subject to taxing is not necessary. They said that not so much amount can be generated from these royalties within the city limits. Ryan Stovall, former council member and headed the tax code revision said that they need to do it if that what it takes to get the updated code passed. He emphasized that taxes are paid on gambling income but they are not trying to get rich from these royalties.
Categories: Federal Tax, Income Tax, Tax Law Tags: federal income tax, federal tax, income tax, tax code
Tax Code Discriminates Marijuana Business
Last Tuesday, Washington and Colorado was the first two states to legalize the recreational use of marijuana. According to the state law, businessmen in the states, also known as ganjapreneurs, can now open marijuana dispensaries for the public to consume. Under the federal law, possession of marijuana is still illegal and this is really a challenge for dispensary owners.
Forbes contributor and partner at Wood LLP, Robert Wood, said that these dispensaries, even though considered as legal, still cannot operate as legal businesses and they will still be labeled as drug traffickers. Operating a marijuana dispensary has been baked in the said code. Section 280E of the United States tax code which was added in the 1980s says that there will be no deduction in the dispensary owner’s gross income.
Because there is no deduction in business expenses, it cripples the dispensary’s ability to turn a profit but there is still a loophole in this. If the dispensary has another business aside from distributing marijuana on the premises, there can be a deduction relating to those businesses. This allows the dispensary owners to subtract the majority of their rent expenses. If you’re thinking of selling paraphernalia, it does not count as a separate business. Owners of marijuana dispensaries in Washington, Colorado and the 16 states that sell medicinal marijuana needs to jump through hoops in order for them to have a viable business model. Choosing to enter in this kind of business can be very risky. Just make sure to comply on what the law is saying and you’re good to go.
Categories: Federal Tax, Tax Law Tags: federal tax, marijuana tax, tax code