Cannabis Accountants and Tax Specialists
280E makes cannabis tax uniquely brutal. Find CPAs who know how to minimize the damage legally.
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Frequently Asked Questions
What is 280E and how does it affect cannabis businesses?
Section 280E of the Internal Revenue Code denies tax deductions for businesses trafficking in controlled substances. Cannabis businesses can only deduct cost of goods sold, not normal operating expenses. This can push effective tax rates to 60-80% without proper planning.
How do cannabis businesses reduce their 280E tax burden?
Proper cost accounting allocates maximum expenses to COGS (which is deductible). Entity structuring separates plant-touching from non-plant-touching activities. Transfer pricing between related entities can also help. A cannabis-specialized CPA is essential for this work.
How much do cannabis accounting services cost?
Monthly bookkeeping runs $500-2,000. Tax preparation costs $2,000-10,000 depending on entity complexity. 280E planning and cost studies range from $5,000-25,000. The ROI is typically 10-50x the cost in tax savings.