Marijuana Businesses Face Tax Limits Until Final Rule Is Issued

Marijuana businesses are subject to tax-code limits until a final federal rule to reclassify the drug is published, the IRS said.

After the Justice Department recommended in April that cannabis be reclassified as less risky and released proposed rules in May to consider the reclassification, the IRS released an announcement Friday to remind taxpayers who are submitting amended returns seeking refunds related to marijuana’s classification that no such payment is coming their way.

Until a final rule is published, marijuana is subject to the limitations of Section 280E of the federal tax code, which disallows deductions and credits for amounts ...