Oakland Medical Marijuana Dispensary Welcomes IRS Audit

Steve DeAngeloOakland’s Harborside Health Center, the largest medical marijuana dispensary in the Bay Area is currently being audited by the IRS. And, the owner, our pal Steve DeAngelo actually welcomes the intrusion.

“I hope what’s going on is that the IRS is making a good faith attempt to understand our industry and to tax us like any other business would be taxed and I’m in support of that, we want to pay our fair share of taxes,” DeAngelo told local reporters.

For one, he’s hoping the audit will bring a change to current tax codes. California dispensaries operate legally under state law, but are illegal under federal law and the IRS doesn’t quite have any tax laws in place to address the difference. Since the Feds consider buying and selling weed a criminal act, they could apply Tax Code 280E. This code was designed in the 80s to derail drug King Pins and disallows “drug trafficking organizations” to deduct business expenses. And, recently, several members of congress drafted a letter to the IRS, asking it to allow dispensaries to deduct their business expenses and also to consider marijuana dispensaries as legitimate businesses that provide medicine to qualified patients.

If the Feds were to enforce the code, “we wouldn’t be allowed to deduct our rent, our payroll, or any of the normal and usual expenses that other businesses deduct,” said DeAngelo who thinks this audit will not only legitimize his thriving marijuana business but legitimize the entire medical cannabis industry as a whole.

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