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Harborside Marijuana Dispensary Not Liable for Tax Penalties

Dec. 20, 2018, 11:54 PM

Harborside Health Center—a medical marijuana dispensary and the subject of a Nov. 29 U.S. Tax Court opinion—doesn’t owe accuracy-related tax penalties for understating its income.

Judge Mark V. Holmes in the November opinion found that Harborside was a drug trafficker under tax code Section 280E and, thus, unable to deduct any expenses other than those directly related to acquiring the products it resold.

“Harborside acted with reasonable cause and in good faith when taking its tax positions,” Holmes said.

The Internal Revenue Service agreed that Harborside had substantiated all its claimed deductions and cost of goods sold ...