Section 280E and the Impact of Tax Reform

Christopher Madison Finance, Industry, Regulations Leave a Comment

Image of cannabis tax forms

Cannabis companies are subject to Section 280E and would benefit from an accounting or inventory method that results in the largest allowable amount allocated to costs of goods sold. This article clearly defines Section 280e, and explains the importance of understanding the provisions of Section 471 (General rule for Inventories) and Regulation/ Section 1.263A (Uniform Capitalization of Costs). A consistent formula allowing capitalization of indirect and direct costs (Section 263A), full absorption of inventory (Setionc 471) can increase your cost of goods sold and lower your taxes. Read More…

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