The No Deductions for Marijuana Businesses Act would amend federal tax law to prohibit marijuana businesses from claiming any tax deductions or credits, regardless of whether marijuana is legal under state law. Currently, Section 280E of the tax code denies deductions for businesses trafficking in controlled substances, but the bill would explicitly expand this to include marijuana even in states where it is legal. This means that marijuana companies operating legally under state law would still be unable to deduct ordinary business expenses like rent, salaries, and equipment costs when calculating federal taxes. The bill was introduced in February 2025 and applies to all amounts paid or incurred after its enactment. The legislation affects legal marijuana businesses in states that have legalized cannabis, creating a significant tax burden that other legal businesses do not face.
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