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States have been passing legislation that legalizes cannabis for medicinal and recreational use, and the producers and retailers in this industry have been growing. Accounting and financial professionals are now tasked with navigating the often contrary state and federal laws. With cannabis being classified as a Schedule 1 controlled substance under the Federal Controlled Substances Act of 1970 and subject to federal prosecution, can CPAs offer services to clients that operate in this industry? If the CPA does offer services, what are the major tax issues (federal and state) that impact this industry? This four-hour afternoon course will answer these questions as well as provide the guidance that accounting professionals need to know to offer services in the cannabis industry.

Objectives

Participants will be able to:

  • Understand the risks of taking on a client in the cannabis industry
  • Recognize state reporting rules
  • Recognize federal reporting rules
  • Differentiate between the federal and state filing requirements
  • Understand IRC Section 280E and what deductions are and not allowed to a cannabis business
  • Apply various state sales and excise taxes that apply to the sale of cannabis
  • Recognize why banks won't allow cannabis based businesses to open a bank account
  • Understand the treatment of revenue and inventory
  • Understand audit considerations
  • Understand sustainability reporting issues

Highlights

  • Types of cannabis related businesses
  • Risk considerations for services offered in the cannabis industry
  • Recognizing what costs are and not considered cost of sales under IRC Section 280E
  • Recognize if the entity conducts a business separate from the cannabis sales that may allow some deductions aside from cost of sales
  • State and federal tax differences
  • Cash based business audit considerations
  • Financial reporting considerations

Who Will Benefit

Any accounting or financial professional that works directly or indirectly in the cannabis industry or is interested in learning more about how this recent state legislation is impacting the accounting profession.

Credits

Category Amount
Accounting 1.00
Auditing 1.00
Tax 2.00
Yikes, the time is near. Please call NMSCPA at (505) 246-1699 to register.

Leaders

  • Edward Zollars

    Edward K. Zollars, CPA, is in public practice in Phoenix, Arizona as a partner with the firm of Thomas & Zollars & Lynch, Ltd. He has been in practice for over twenty five years, specializing in tax issues for closely held businesses and individuals. Ed has been professionally involved with both tax and technology issues, combing the two disciplines in starting the first tax podcast (Ed Zollars Tax Update, produced weekly dealing with current tax issues. He has been a member of AICPA Tax Division Committees dealing with tax and technology issues, and was the Tax Section’s representative on three occasions to the AICPA’s Top Ten Technologies project. Ed is also a member of the Phoenix Tax Workshop’s Advisory Committee, and currently serves on the Tax Legislation Liaison Committee for the Arizona Society of CPAs. Ed was selected as a Life Member by the Arizona Society of CPAs in May of 2010. Ed is a co-author of the Arizona Income Tax Guide published by the Phoenix Tax Workshop, and has written articles published in Practical Tax Strategies and the Tax Adviser. He has been a frequent contributor to a number of professional tax discussion groups, and served as systems operator on the AICPA’s Accountants Forum in the mid 1990s. He has spoken regularly on tax and technology topics since 1996, speaking before conferences sponsored by the AICPA and a number of state society of CPAs.

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