COLORADO TAXES | AUG 5, 2011 | Medical Marijuana as Medicine and Non-Taxable | On Tuesday, despite evidence that the tax could yield tens of thousands of dollars in revenues annually, the council decided to leave it off the ballot. - Council member Bob Saunders said that since the town doesn’t have an excise tax on pharmaceuticals, he doesn’t see why it would tax medical marijuana.
Tax attorney - Robert W. Woods, states: "Sales tax isn’t the only issue. As I noted here, the IRS also has issues with medical marijuana. Under federal tax law, Internal Revenue Code Section 280E precludes deductions for any business trafficking in controlled substances. For that reason, some dispensaries have been stuck paying tax on their gross income, not on their net after expenses!
Jan 2011 - Arizona | Attorney General Tom Horne is using a loophole in Prop 203 (the medicalmarijuana law that voters passed in 2010) on which to base his sales tax ruling. The law says would-be medical marijuana patients can get a “doctors’ recommendation” for the drug– not a prescription. Prescriptions are not taxable; doctors’ recommendations are. (This is like saying your doctor recommended aspirin or multi-vitamins; when you go to buy the aspirin or multi-vitamins, they are subject to sales tax.)