A congressional proposal to prevent marijuana businesses from accessing standard tax deductions—regardless of whether marijuana is federally rescheduled—has now garnered 11 sponsors across both chambers of Congress.
In the House of Representatives, the bill—introduced last month by Representative Jodey Arrington (R-TX)—gained its ninth sponsor on Friday, with Representative Adrian Smith (R-NE) signing on. The legislation, House Bill 1447, would amend the Internal Revenue Code to ensure that marijuana businesses remain barred from deducting common business expenses such as rent and payroll, even if the Drug Enforcement Administration (DEA) moves marijuana to a lower schedule.
Currently, Section 280E of the tax code prohibits businesses tied to Schedule I or II substances from claiming deductions. A rescheduling of marijuana to Schedule III would typically lift that restriction, offering marijuana businesses some financial relief. Arrington’s bill is designed to block that change, locking in the tax burden even after rescheduling.
A companion measure, Senate Bill 471, was filed last month in the Senate and has two cosponsors, bringing the total number of congressional sponsors to 11.
The proposal comes as the DEA’s rescheduling effort remains stalled, with administrative hearings that were set to begin in January now canceled, further delaying clarity on the federal status of marijuana.
Currently there is no other marijuana-related bill that’s been filed in the U.S. Congress this session than has more than a single sponsor.
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