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TaxBuzz Top 5 - Trump Order to Reclassify Cannabis Could Have Tax Impact, ICC Warns UN Talks Could Lead to Double Taxation & More

by
Rebekah Barton
on
12/19/2025
TaxBuzz Top 5 - Trump Order to Reclassify Cannabis Could Have Tax Impact, ICC Warns UN Talks Could Lead to Double Taxation & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Trump Order To Reclassify Marijuana to Schedule III Could Ease Federal Tax Burdens But Stops Short of Legalization

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Credit: Jose S/Getty Images

President Donald Trump this week signed an executive order directing federal agencies to resume the process of reclassifying marijuana from a Schedule I to a Schedule III drug under the Controlled Substances Act, a move that could have broad implications for tax policy, the cannabis industry, and federal enforcement — even though it does not legalize marijuana at the federal level.

Under federal law, businesses dealing in Schedule I substances — which include marijuana, alongside heroin and LSD — have long been barred from claiming ordinary business deductions on their federal tax returns under Internal Revenue Code Section 280E. Rescheduling marijuana to Schedule III — a category that includes substances such as ketamine and certain steroids — could allow state-legal cannabis businesses to finally deduct everyday business expenses like rent, wages, advertising, and supplies, potentially saving hundreds of millions of dollars annually. 

Experts note, however, that the change wouldn’t equate to full federal legalization and would not automatically legalize recreational cannabis nationwide or resolve other structural issues in the sector, such as banking access or interstate commerce restrictions. 

Beyond businesses, broader tax policy could shift as the government grapples with how Schedule III status affects federal enforcement, research incentives, and state-federal tax disparities — since many state programs already treat cannabis differently than federal law. More research and pharmaceutical interest could also emerge, says Ohio State's Moritz College of Law, if cannabis products become easier to study and develop under federal guidelines. 

The executive order still requires formal regulatory action and DEA review before rescheduling takes effect, meaning the tax and legal impacts will unfold over months — and may prompt further legislative proposals on both industry taxation and broader cannabis reform.

2. Indiana Lawmakers Seek Tax-Linked Solutions to Child Care Crisis as Access and Affordability Worsen

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Credit: Vanessa Nunes/Getty Images

Indiana policymakers are increasingly focused on child care access and affordability as a key economic and workforce issue heading into the 2026 session, with several tax-related policy options gaining traction amid broader budget pressures and declining support programs. Lawmakers and advocates agree that the state’s shortage of affordable child care is hurting working families and constraining workforce participation, a problem that has cost Indiana an estimated $4.2 billion annually in lost economic activity and tax revenue. 

Per Axios, some supporters are suggesting local tax referendums to let communities raise property taxes specifically to fund child care and preschool initiatives, bypassing state budget gridlock. Simultaneously, state lawmakers like Rep. Dave Heine are exploring expanded tax credits for donations to scholarship-granting organizations that support early childhood education, as well as standalone refundable child-care-related tax credits aimed at helping parents and providers directly.

Those efforts are happening against the backdrop of cuts to Indiana’s Child Care and Development Fund vouchers and sharply reduced reimbursement rates for providers — moves that have forced some centers to close and made care even more costly for families.

Experts and national analyses from the Urban Institute show this isn’t just a Hoosier story. Child care costs are a major affordability pressure for families nationwide, limiting labor force participation and economic stability.

3. ICC Warns UN Tax Talks Could Raise Risk Of Double Taxation Without Safeguards

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Credit: Sammyvision/Getty Images

The International Chamber of Commerce (ICC) — the world’s largest business organization representing over 45 million companies worldwide — is sounding the alarm about double taxation risks emerging in ongoing United Nations negotiations on a global tax framework. These talks aim to create a UN Framework Convention on International Tax Cooperation to set international tax rules on everything from allocating taxing rights to resolving disputes. 

At the heart of ICC’s concern is Article 4 of the draft convention text, which outlines how taxing rights over cross-border profits might be shared among countries. Under its current wording, multiple nations could claim the right to tax the same income — for example, where multinationals earn profits across jurisdictions without clear rules on how income is attributed or taxed. If unchecked, that ambiguity could lead to companies being taxed multiple times on identical profits, discouraging cross-border investment, trade and job creation. 

To address this, ICC is calling for the convention to explicitly include mandatory safeguards and relief mechanisms — such as tax credits, exemptions or clear residence-country relief rules — to prevent double taxation. Without these, firms operating internationally could face higher compliance costs and uncertainty, which in turn could slow global economic growth.

The UN talks are part of a broader push to modernize international tax cooperation and fill gaps left by existing systems like the OECD/G20 Inclusive Framework’s Pillars, where preventing double taxation and allocating taxing rights has been an ongoing challenge. 

As negotiations continue through 2026 and 2027, stakeholders including governments, business groups and civil-society organizations will be watching closely to see whether the final text balances fair revenue allocation with certainty for taxpayers in the global economy.

4. Tucson Mayor Blames Broader Economic Policies For City Tax Hikes Amid Budget Squeeze

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Credit: Brad Holt/Getty Images

Tucson’s city leadership is blaming federal and state economic trends, including policies tied to the Trump era and Arizona’s flat income tax, for recent local tax increases and budget pressure that led the City Council to raise fees on utilities, hotel rooms, pawn shops and other services to address a multi-million-dollar shortfall. 

Mayor Regina Romero, Tucson’s long-serving Democratic mayor, has pointed to lagging local tax revenues and broader economic uncertainty as justification for the changes, tying some of the city’s fiscal challenges to what she describes as “failed economic policies” at the federal level under President Donald Trump — including tariff impacts on tourism and business activity — and at the state level with Arizona’s flat income tax model. Romero said these combined pressures have reduced shared revenue flowing to Tucson and forced the council to act on tax and fee hikes to maintain services. 

The council’s action follows projections that sales tax revenues are below expectations, pushing city officials to consider a mix of revenue enhancements and spending adjustments for core services like public safety and parks. 

Romero’s comments — which drew a social media rebuttal from local commentators emphasizing governance over “blame” on federal figures — reflect a broader debate over how much municipal budgets are shaped by national policy versus local decision-making. 

As the city moves ahead with the new tax and fee structure, residents and analysts alike are watching how much of the strain is truly local versus tied to broader economic trends.

5. Congress Fails To Extend Obamacare Premium Tax Credits, Leaving Expiration Looming

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Credit: Stefani Reynolds/Bloomberg/Getty Images

Congress has adjourned for the year without renewing the enhanced premium tax credits under the Affordable Care Act (ACA) — a move that will have wide-ranging tax and health-coverage consequences for millions of Americans beginning January 1, 2026. The enhanced credits, which were expanded during the pandemic and amplified by later legislation, help lower monthly premiums for households buying insurance through ACA marketplaces; they are set to expire December 31, 2025 unless lawmakers act when Congress reconvenes.

Efforts to extend the credits ran into partisan gridlock. The U.S. Senate failed to pass Democratic and Republican proposals this month that sought to address the pending lapse, including a Democratic proposal to renew the credits for three years and a GOP alternative focused on health savings accounts, because neither secured the 60 votes needed under Senate rules. 

At the U.S. House level, a group of moderate Republicans broke ranks with leadership to force a discharge petition for an extension vote, highlighting tensions within the GOP over the issue; however, no final deal has been reached.

If the enhanced premium tax credits do expire as scheduled, independent estimates show that average marketplace premiums could more than double or even triple for many enrollees, disproportionately affecting older adults and families above certain income thresholds who would lose subsidy eligibility.

Beyond household budgets, economists warn this “subsidy cliff” could increase the uninsured rate, strain state health systems, and reduce economic activity tied to predictable health-care costs, effects that extend beyond just the ACA marketplace to broader federal tax and public-health policy debates.

Which headline this week most interests you?

Feature Image Credit: Olena Ruban/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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