By Treasury and IRS Add Marijuana Tax Guidance to Priority Plan
Federal officials say they will prioritize issuing tax-related guidance for marijuana businesses within the next year. The U.S. Department of the Treasury and IRS have included “Guidance under §280E” in their 2026 2027 Priority Guidance Plan. The document lists the item among 121 projects officials plan to prioritize over the next year.
The plan, released last week, covers the federal fiscal year that runs from October 1, 2026 to September 30, 2027. The document “does not provide any deadline for completing the projects,” according to the IRS. It also offers no marijuana-related information beyond the single line item.
The IRS said the Treasury Department’s Office of Tax Policy and the IRS use the Guidance Priority List each year to identify and prioritize tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The agency said the list “focuses resources on guidance items that are most important to taxpayers and tax administration.”
Treasury and IRS first announced in April that they planned to issue guidance on tax issues for marijuana businesses stemming from rescheduling. That guidance has not yet been issued.
Why 280E Matters for Cannabis Businesses
The IRS tax code known as 280E has prevented marijuana businesses from taking ordinary tax deductions and credits available to most businesses. The code only applies to Schedule I and II substances under the Controlled Substances Act.
Under an order issued by Attorney General Todd Blanche in April, marijuana regulated by a state medical cannabis license immediately moved to Schedule III. Marijuana products in state-legal recreational markets remain in Schedule I, subject to an ongoing hearing process considering broader rescheduling.
Treasury and IRS previously said they “expect DOJ’s action to have significant positive tax consequences for businesses in the medical marijuana industry.” They said rescheduling “generally removes section 280E as a bar to claiming deductions and credits” for businesses that no longer traffic in Schedule I or II controlled substances.
Because the rescheduling action is being rolled out in phases, companies serving both medical and recreational markets may only immediately obtain tax relief for parts of their businesses. The agencies said guidance is expected to clarify how 280E applies only to activities involving Schedule I or II substances, for example by apportioning expenses.
Lawmakers Press for and Against Guidance
In May, a group of congressional Democrats sent a letter asking Treasury Secretary Scott Bessent and IRS Chief Executive Officer Frank Bisignano to issue “prompt guidance” on tax issues for marijuana businesses. The lawmakers wrote that the absence of clear guidance “will leave taxpayers uncertain as to how they can benefit from the tax code.”
In June, a pair of Republican lawmakers sent a letter to the treasury secretary saying they are “concerned” and “troubled” that marijuana businesses will be eligible for tax relief. Those lawmakers previously filed the No Deductions for Marijuana Businesses Act, which would continue to block cannabis industry tax deductions even under rescheduling.
