Nikola Vujcic
84 Geo. Wash. L. Rev. 249
Congress enacted section 280E of the Internal Revenue Code to prohibit taxpayers engaged in the sale of illegal drugs from taking deductions on their income. Section 280E was passed after the Tax Court upheld deductions taken by a self-employed marijuana and narcotics dealer. Today, section 280E still persists in the Code and has consequently been interpreted to prohibit operators of state-sanctioned medical marijuana dispensaries from taking ordinary and necessary business deductions despite the legitimacy of their businesses. There appears to be a misalignment in the initial purpose of the statute and its current impact on medical marijuana dispensaries. Rather than await a congressional response, this Note proposes that the Supreme Court adopt a purposive interpretation of section 280E and subsequently hold that the individuals who operate state-sanctioned medical marijuana dispensaries are not prohibited from taking business expense deductions under section 162 of the Internal Revenue Code. The nature of the statute in context with the Tax Code generally suggests that the Court should interpret the provision in a manner that best aligns with the statutory purpose. Furthermore, the pertinent legislative history and social context surrounding the statute’s enactment suggest that the statute’s purpose was intended to punish a type of drug dealer that is readily distinguishable from state-sanctioned medical marijuana dispensaries.
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