Statements on Introduced Bills and Joint Resolutions

Floor Speech

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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.

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