OKC Standard

Senator James Lankford of Oklahoma has introduced a bill aimed at preventing marijuana businesses from claiming tax deductions on their business expenses. Senator Pete Ricketts from Nebraska joined Lankford in supporting the legislation.

“Marijuana doesn’t make our families stronger, our streets safer, or our workplaces more productive. Businesses who sell federally illegal drugs—including marijuana businesses—shouldn’t get federal tax breaks. This bill clarifies federal tax law to make sure a federally illegal product does not have a federally legal tax deduction,” said Lankford.

Dr. Kevin Sabet, President and CEO of Smart Approaches to Marijuana (SAM), expressed support for the bill: “We thank Senator Lankford for his strong leadership in both fiscal responsibility and drug policy. The federal government should not be in the business of giving tax relief to the federally illegal, addiction-for-profit marijuana industry. This legislation would prevent deficit increases while ensuring that taxpayers don’t foot the bill for the revenue gap made by tax write-offs for people who choose to violate federal law and poison our kids.”

Under current tax law established by the Tax Equity and Fiscal Responsibility Act of 1982, businesses dealing with Schedule I or II drugs cannot deduct business expenses. However, if efforts by the Biden Administration to reschedule marijuana succeed, these businesses could potentially claim such deductions. The proposed bill seeks to address this potential issue preemptively.

Oklahoma has over 3,000 licensed marijuana growers. The Oklahoma Bureau of Narcotics has raised concerns about many farms having connections with Chinese entities since marijuana was legalized in 2018. This development has reportedly led to other crimes such as human trafficking, forced labor, and money laundering in the state. In response to these issues, Senator Lankford also introduced the Soil Act to prevent foreign entities from purchasing agricultural land in Oklahoma.