This story originally appeared on Benzinga
When Colorado Congressman Ed Perlmutter of the House Financial Services Committee asked Treasury Secretary Janet Yellen on Wednesday whether she agreed that cannabis companies’ access to U.S. banks would make it easier for the IRS to collect taxes, she said. replied “Yes, of course. ”
No one doubts that the IRS would also like to see the cannabis industry’s billion-dollar revenues flow into its coffers. US banks would probably be happy to join in on the action as well.
RELATED: Federal Regulators Want Congress To Pass Cannabis Banks Now
How the Bank Act will help
Here’s a start, at least from the perspective of banks, some of whom are pressuring lawmakers to support the Secure and Fair Enforcement (SAFE) Banking Act, which seeks to create protections and enable financial institutions that provide banking services from legitimate cannabis companies.
In a recent move to push the boundaries a bit, the American Bankers Association, Union National Association, United Food and Commercial Workers Union (UFCW), wrote a letter to Senate leaders imploring them to allow legitimate businesses to cannabis to access banking services. The hope, according to the group, is to pass marijuana banking reform as part of this year’s National Defense Authorization Act (NDAA).
Even though the sale or use of marijuana is legal to some extent in 47 states and Washington, DC, it is still illegal at the federal level. In states where cannabis is fully legal, financial institutions that accept money earned from weed may face federal fees, forcing cannabis producers, distributors, and retailers to conduct their transactions in cash. .
“If you were serious about building an industry that was dependent on gangs and cartels, do it all with the money. It’s almost as if the system that exists now is geared towards promoting things we don’t want, ”said Sen. John Hickenlooper (D-Colo.), Speaking at The Hill’s Regulating Cannabis event. .
“If you deprogram it, the banks can start banking it so it’s not a cash flow anymore. There are multiple negative consequences of this being a cash business. The first is that the businesses themselves cannot get loans. Hickenlooper told The Hill.
Some bipartisan support
Representative Nancy Mace (RS.C.), who voted for the SAFE Banking Act and is one of the few Republicans in Congress in favor of decriminalizing marijuana, introduced legislation to decriminalize and tax marijuana in the federal level in mid-November.
“There is nothing really controversial about cannabis, except here in Washington where you have members who are afraid of it, or afraid to touch it. It shouldn’t be, ”Mace said.
“We fund the cartels by having all activity in cash,” Mace added, reiterating the notion expressed by Hickenlooper. “It’s dangerous.”
Meanwhile, the Internal Revenue Service is clearly chomping at the bit.
In October, the IRS provided helpful suggestions to cannabis businesses in the form of a seminar presented by the National Association of Tax Professionals for cannabis businesses in which they learned that all income from any source is taxable. . The IRS also created a new website last year to tax state-compliant cannabis dispensaries.