News » IRS Hits Oakland Dispensary With Massive Tax Bill





The IRS informed Harborside Health Center in Oakland, California that it owes a massive $2.5 million in back taxes for 2007 and 2008.

The source of this huge bill? The Internal Revenue Service prohibits medical marijuana dispensaries from taking the same deductions that most businesses are able to take advantage of. These deductions include employee payroll, insurance, rent, workers’ compensation and other operating costs.

This could be bad news for the dispensaries 94,000 patients – Harborside has indicated they may not be able to pay the massive bill and would be forced to close. To further compound matters, The IRS has indicated that they plan to audit tax returns from 2009 and 2010 as well when the total revenue grew from $7 million to $22 million – meaning an even larger bill could be on the way.

While the IRS declined to give a comment, Harborside executive director Steve DeAngelo was clear on his opinion.

“This is not an effort to tax us. We’re happy to pay our taxes,” he said. “This is an effort to shut us down.”

[source San Francisco Chronicle]

Tags: dispensary, Harborside Health center, irs, Oakland, Steve DeAngelo