(10-04) 18:12 PDT Oakland -- A leading Oakland marijuana dispensary was hit with a $2.5 million tax bill this week which may force its closure, dispensary staff said Tuesday.
Harborside Health Center owes the Internal Revenue Service back-taxes for 2007 and 2008, based on a federal law prohibiting marijuana dispensaries - unlike other businesses - from deducting payroll, insurance, rent, workers' compensation and other operating costs from its revenues.
"We think this assessment is unfair and inaccurate. We have no choice but to fight this," said Harborside executive director Steve DeAngelo. "I'm profoundly concerned on behalf of our patients."
IRS spokesman Jesse Weller had no comment on the case.
Harborside, one of the largest marijuana dispensaries in the world,
has 94,000 clients and last year posted $22 million in revenues.
In 2007 and 2008, the years under scrutiny by the IRS, Harborside
earned about $7 million and $12 million, respectively, DeAngelo said.
Other large dispensaries, including the Marin Alliance for Medical
Marijuana, have also been slammed with large tax bills.
The IRS also plans to audit Harborside's tax returns for 2009 and
2010, DeAngelo said.
"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."
