Skip to content

Recent Posts

  • Taxgirl Goes To The Movies: Star Wars
  • Looking For Tax Breaks?
  • Taxgirl Goes Back To The Movies In 2025
  • Here’s What You Need To Know About Submitting Tax Questions
  • Looking For More Great Tax Content?

Most Used Categories

  • individual (1,314)
  • politics (862)
  • IRS news/announcements (753)
  • tax policy (582)
  • ask the taxgirl (543)
  • prosecutions, felonies and misdemeanors (479)
  • just for fun (478)
  • state & local (403)
  • pop culture (399)
  • charitable organizations (389)
Skip to content

Taxgirl

Because paying taxes is painful… but reading about them shouldn’t be.

  • About Taxgirl
  • Info
    • My Disclaimer
    • A Word (or More) About Your Privacy
    • Subscribe
  • Ask The Taxgirl
  • Comments
  • Taxgirl Podcast
    • Podcast Season 1
    • Podcast Season 2
    • Podcast Season 3
  • Contact
  • Home
  • 2013
  • April
  • 20
  • As Many Celebrate 4/20, Feds Still Won’t Budge On Regulation & Taxation of Marijuana

As Many Celebrate 4/20, Feds Still Won’t Budge On Regulation & Taxation of Marijuana

Kelly Phillips ErbApril 20, 2013July 8, 2020

Today is April 20 or 4/20.

If I get a blank stare with that proclamation, then you’re among the millions of Americans who are outside of counterculture. You see, 420 is famously (or infamously, depending on who you ask) associated with the celebration of marijuana.

While there are dozens of theories about how the date came to have such significance, the most widely accepted can be traced to a group of teenagers from San Rafael, California. The group, nicknamed the Waldos for their favorite hangout spot (a wall outside of school), used to meet after school to smoke pot. The timing of their meeting, 4:20 pm, became a kind of greeting in the hallway, and the rest, as they say, is stoner history.

Nearly 40 years later, the use of marijuana has spread from high school age kids taking illegal drags behind walls to a more front and center movement. While still prohibited by federal law (possession can lead to fines and jail time), eighteen states allow the possession of marijuana for medical purposes. And even though it remains illegal under any circumstances under federal law, wow states, Washington and Colorado, allow pot to be regulated and taxed like alcohol: those 21 and older may smoke pot (restrictions apply).

The sentiment that states ought to be able to regulate – and tax – marijuana is growing. Even those that don’t believe that marijuana should be legal have concerns about states’ rights. According to a Gallup poll, as of December 2012, 64% of Americans were opposed to the federal government regulating marijuana when it contrasts with state law.

So why won’t the feds budge? Think of all of that revenue they could bring in if they, like Colorado, were to legalize and tax marijuana. It’s complicated.

It was the taxation of marijuana in the 1930s which led to the criminalization of marijuana in the first place. In the early part of the 20th century, during Prohibition, booze was illegal but marijuana was not. Under the 1937 Marihuana Tax Act, there was a two-part tax on the sale of marijuana; one which functioned like a sales tax and another which was more akin to an occupational tax for licensed dealers. Violations of the Act resulted in serious consequences.

In 1969, Timothy Leary challenged his arrest for possession of marijuana under the Act; the case of Leary v. the United States made it to the Supreme Court. The Court invalidated part of the Act as a violation of the Fifth Amendment (against self-incrimination). The result was a new law, the Controlled Substances Act, passed in 1970, which criminalized the possession or sale of marijuana.

Forty years later, the debate about the legalization of marijuana – and the right to regulate and tax it rages on. States see this as their opportunity to control and tax a substance already being sold on street corners. But the feds steadfastly refuse to budge, even for medical reasons. With nearly half of all states now legalizing the drug in some way, is that about to change?

Facebooktwitterlinkedinmail
author avatar
Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
See Full Bio
social network icon social network icon
4/20, Controlled Substances Act, marijuana, YouTube

Post navigation

Previous: Making A Difference After Boston: Charitable Giving, Crowdfunding & Other Donations
Next: Ready Or Not: Lauryn Hill Sentencing For Tax Evasion Postponed

Related Posts

gas pumps

A Look at the (Very) Unpopular Federal Gas Tax

February 17, 2022March 2, 2022 Kelly Phillips Erb

Justice Matters: The Tax Trial Of Martin Luther King, Jr.

January 18, 2021January 19, 2021 Kelly Phillips Erb
PNC Christmas Price Index

PNC Says ’12 Days Of Christmas’ Will Be A Little Bit Different Due To COVID

December 15, 2020January 26, 2021 Kelly Phillips Erb

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

© 2005-2022, Kelly Phillips Erb | Theme: BlockWP by Candid Themes.
Skip to content
Open toolbar Accessibility Tools

Accessibility Tools

  • Increase TextIncrease Text
  • Decrease TextDecrease Text
  • GrayscaleGrayscale
  • High ContrastHigh Contrast
  • Negative ContrastNegative Contrast
  • Light BackgroundLight Background
  • Links UnderlineLinks Underline
  • Readable FontReadable Font
  • Reset Reset
  • SitemapSitemap
  • FeedbackFeedback