Harborside Files Appeal on US$11.0 Million Tax Ruling
Harborside Inc (CSE: HBOR) has formally resumed its fight with the US government on the topic of taxes and how they are applied to dispensaries. The firm released news this morning that they have formally filed a notice of appeals with the United States Court of Appeals in the Ninth Circuit. The issuer is disputing the $11.0 million final ruling issued in October for its Oakland dispensary.
Collectively, it was ruled in October that US$11,013,237 was owed by Harborside to the Internal Revenue Service as a result of failure to pay taxes by the dispensary over a number of years. While the initial ruling was in the firms favour as it relates to dollar amounts, Harborside is disputing the ruling based on the manner in which costs of goods sold was calculated.
The resumption of the legal battle by the issuer is viewed as being a fight for the entire cannabis industry, with interim CEO Peter Bilodeau stating that it demonstrates the firms commitment to remaining a leader in the fight for local, state, and federal legalization.
There is an increasing realization that Section 280E as applied by the IRS is tax imposed without regard to income and violates the Sixteenth Amendment to the Constitution which requires that the federal tax must be measured by income, not sales. We remain hopeful that the Ninth Circuit will understand this.Steve DeAngelo, co-founder of Harborside
Nothing is expected to come of the appeal until late 2020, which further pushes out the liability of the firms tax payable.
Harborside Inc last traded at $1.00 on the Canadian Securities Exchange.
Information for this briefing was found via Sedar and Harborside Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.