Taxing & Zapping Marijuana: Blockchain Compliance in the Trump Administration Part 1

14 Pages Posted: 15 Mar 2018 Last revised: 14 Sep 2018

Richard Thompson Ainsworth

NYU - Graduate Tax Program; Boston University - School of Law

Brendan Magauran

Independent

Date Written: August 27, 2018

Abstract

On January 4, 2018, the Trump Administration through Attorney General Sessions rescinded an Obama-era policy1 that discouraged federal prosecutors from bringing charges in all but the most serious marijuana cases under the federal Controlled Substances Act,2 as well as under the Bank Secrecy Act.3 Federal law is at odds with state law in the majority of states on the legalization and subsequent state taxation of marijuana.4 Twenty-eight states and the District of Columbia have at least partially legalized marijuana. Eight of these states have legalized both medicinal and recreational use.5 With limited exceptions, legalized sales of marijuana are taxed.

We will consider this federal-state tax (and criminal enforcement) topic in a series of five papers. The first is introductory in nature. We examine the State tax and enforcement issues surrounding the legalized marijuana trade. Each of the other papers in this series will consider a specific marijuana fraud vector and present solutions to it.

Keywords: TAT STS Track and trace Seed to sale Front-end frauds Legalized marijuana Controlled Substances Act Bank Secrecy Act BSA CSA METRC Home grown marijuana

JEL Classification: K10, K19, K39

Suggested Citation

Ainsworth, Richard Thompson and Magauran, Brendan, Taxing & Zapping Marijuana: Blockchain Compliance in the Trump Administration Part 1 (August 27, 2018). Boston Univ. School of Law, Law and Economics Research Paper No. 18-03. Available at SSRN: https://ssrn.com/abstract=3141203 or http://dx.doi.org/10.2139/ssrn.3141203

Richard Thompson Ainsworth (Contact Author)

NYU - Graduate Tax Program ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

Brendan Magauran

Independent ( email )

No Address Available

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