Tool #8
Cannabis Business Profitability Calculator
See how 280E crushes your margins - and what your profitability would look like under normal business taxation.
Business Details
C-Corp: 21% federal rate. Pass-through entities: up to 37%.
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Includes direct materials, production labor, packaging, testing, and inventory costs. This is the only deduction allowed under 280E.
Operating Expenses280E non-deductible
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Tax Rates
Results
Gross Profit
$1,200,000
Gross margin: 60.0%
Operating Income
$740,000
Before tax
280E Tax Impact
Tax WITH 280E
$550,080
Tax WITHOUT 280E
$339,216
280E Penalty
$210,864
Extra tax you pay because operating expenses are non-deductible under IRC 280E
Effective Tax Rate Comparison
Your effective rate (with 280E)27.5%
Normal business rate (without 280E)17.0%
Net Profit After Tax (with 280E)
$189,920
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