[Congressional Record Volume 161, Number 55 (Thursday, April 16, 2015)]
[Senate]
[Page S2249]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Mr. Merkley, and Mr. Bennet):
  S. 987. A bill to amend the Internal Revenue Code of 1986 to allow 
deductions and credits relating to expenditures in connection with 
marijuana sales conducted in compliance with State law; to the 
Committee on Finance.
  Mr. WYDEN. Mr. President, I am here today standing up for the people 
of Oregon and recognizing their decision to legalize and regulate 
marijuana for recreational use in the State.
  Together with Senators Merkley and Bennet, I am introducing the Small 
Business Tax Equity Act, which will provide more equitable Federal tax 
treatment for small marijuana businesses who comply with State law. 
This comes after more than 56 percent of Oregonians voted for marijuana 
legalization. Congressman Blumenauer is introducing a companion bill in 
the House.
  Unlike its treatment of all other legal businesses, the tax code 
currently denies these marijuana businesses, legitimate businesses, the 
ability to deduct ordinary expenses. Expenses, such as employee pay and 
rent, that are essential to operating any successful small business.
  This is one piece of the equation as Federal tax inequalities for 
marijuana businesses extend beyond deductions. For example, other 
businesses are also eligible for the Work Opportunity Tax Credit for 
hiring veterans. Therefore the inability to make deductions, combined 
with other lost credits, often leads to these businesses paying an 
effective tax rate ranging from 65-75 percent; compared with other 
businesses who pay between 15-30 percent.
  This issue is not unique to Oregon. Oregon is one of four States, 
along with the District of Columbia, where voters have passed measures 
that permit the legal adult use and retail sale of marijuana. Oregon is 
one of 23 States, along with the District of Columbia, have passed laws 
allowing for the legal use of medical marijuana.
  Unfortunately, Federal law has not caught up with changing State 
laws, creating contradictions, and leaving these legal businesses in a 
tough position.
  Today, I am introducing a bill to fix this problem. Marijuana 
businesses operating legally under state law should be able to deduct 
ordinary business expenses just like any other businesses. Voters have 
legalized their product, now let's help create a more level playing 
field that recognizes their business operations.
  It is the right thing to do. It is only fair that Federal tax law 
respect the decision Oregonians, and citizens from other States and the 
District of Columbia, made at the polls.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 987

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Tax Equity 
     Act of 2015''.

     SEC. 2. ALLOWANCE OF DEDUCTIONS AND CREDITS RELATING TO 
                   EXPENDITURES IN CONNECTION WITH MARIJUANA SALES 
                   CONDUCTED IN COMPLIANCE WITH STATE LAW.

       (a) In General.--Section 280E of the Internal Revenue Code 
     of 1986 is amended by inserting before the period at the end 
     the following: ``, unless such trade or business consists of 
     marijuana sales conducted in compliance with State law''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to taxable years ending after the 
     date of the enactment of this Act.
                                 ______