Legal Marijuana Highlights Need For Tax Reform

With Washington and Colorado legalizing marijuana, the fledgling industry in those states is lobbying to pay taxes – and take advantage of the deductions. Though pot growers and retailers will pay federal income tax on their profits, marijuana is still illegal under federal law and they won’t have access to deductions or credits under the Internal Revenue Code. On top of that, if it were legal buyers would pay federal taxes on purchases, generating an estimated $20 billion a year for U.S. government coffers.