Email Our Firm

I 502 Marijuana Law Update: Taxation Legality Challenged

One of the most widely used arguments for recreational marijuana legalization is now being challenged as violation of federal law. A lawsuit recently filed in Washington asks whether Washington State can legally tax an activity that is illegal under federal law.

If you have questions about I-502's taxation regulations, or about the recreational marijuana business in general, you should contact a local marijuana law attorney.

Similar to the federal case regarding medical marijuana in Oregon, this recently filed case seeks to force the issue of the conflict between federal laws and state laws. In this case, a man facing charges both for criminal distribution of marijuana (a federal crime) and for failing to pay the state Department of Revenue taxes from that distribution argues he can't pay the state taxes without implicating himself in the criminal matter. He argues, therefore, Washington should not be allowed to tax him on a federally criminal activity.

Though few doubt the recreational marijuana sales create a conflict between federal and state law, the case will likely turn on the Court's specific interpretation of what exactly is being taxed. For example, the author of Washington's marijuana law argues since the taxation is on the activity, rather than the marijuana product, there is no conflict of laws. In fact, the US Supreme Court has held even where an activity is unlawful, that activity may still be taxed.

Like the case in Oregon, this case presents the opportunity for the court to confront the conflict of laws issue in a decisive manner. Whether either court takes that route is yet to be determined. You should contact a marijuana business law attorney to help you navigate through these and other complex marijuana law issues.

No Comments

Leave a comment
Comment Information

Client Testimonials

  1. “Your business model is such a fresh approach to the way legal services are typically delivered.”

    President, Manufacturing
  2. “Phil will help you understand the process you are going through, and is very passionate about your needs and situation.”

  3. “Phil, responded to my numerous questions promptly and completely. Very reasonable rates, no overbilling. Kept me informed of progress.”

  4. “Ben legally clarified the language in my contracts without turning them into super verbose mumbo-jumbo.”

    Kevin L.
  5. “Everyone, that I've interacted with is professional, knowledgeable, forthcoming with information and educating and caring.”

    Alanna C.

425 NW 10th Avenue
Suite 200
Portland, OR 97209

Toll Free: 866-280-7562
Phone: 360-258-1268
Fax: 503-417-4250
Map & Directions