Marijuana Dispensary Takes Tax Break Dispute to Supreme Court

A marijuana dispensary is urging the U.S. Supreme Court to weigh in on its dispute with the IRS over improper business deductions.

At the center of the case is tax code Section 280E, which says that a business that consists of trafficking in a Schedule I or II controlled substance can’t receive any tax deductions—and state-legal marijuana businesses currently fall under that restriction.

The code section violates the 16th Amendment of the U.S. Constitution, and the U.S. Court of Appeals for the Tenth Circuit mistakenly concluded that the Controlled Substances Act “reigns supreme” over Colorado cannabis laws, ...