Cannabis complications for CPAs, clients and consumers.
By Justin P. Breidenbach
Providing a client with tax services can be hard work. Things get especially difficult when an accountant becomes the bearer of bad news. It’s never easy informing a client that they owe unexpected or, what the client believes to be, unreasonable taxes. Imagine a situation where you had to tell a client that their effective tax rate is 70%, 90%, or even exceeds 100%.
I expect some may be reading this and asking themselves, “What tax hell would require a taxpayer to pay an effective rate exceeding 100%?” I am here to inform you that this does exist, and in the marijuana industry it is known as Section 280E.