This post is presented by our media partner Cannabis News Wire
View the original article here.
Governor Kathy Hochul has signed into law a measure that provides tax relief to cannabis businesses in the state of New York. The measure, which was approved by the Senate and Assembly a few months ago, fills a policy gap left by a separate measure the governor signed in 2022, which included provisions that permitted tax deductions for marijuana businesses in the state.
In summary, the resolution would permit deductions for business expenses incurred by those authorized by the law to sell, distribute or produce medical marijuana or adult-use marijuana products, for purposes of the business corporation tax, the general corporation tax and the unincorporated business tax. A memo attached to this resolution stated that the modification was appropriate as the expenses of marijuana-related businesses couldn’t be deducted for federal purposes.
Legislators in a few other states have been looking into a tax workaround as state-licensed marijuana businesses continue to grapple with considerably higher federal tax rates as a result of prohibition. For instance, lawmakers in Pennsylvania passed a large-scale tax reform measure in October that contained language to offer state-level relief to medical cannabis businesses.
Governor Janet Mills of Maine also signed a measure to separate state tax from the federal policy for marijuana businesses. In addition, Connecticut Governor Ned Lamont also signed a budget resolution that included provisions offering tax relief at the state-level to licensed cannabis businesses as a workaround for the growing industry.
Illinois Governor J.B. Pritzker also signed a budget measure that included provisions that permitted licensed cannabis businesses to take state tax deductions that were currently prohibited under the 280E code. Prior to the moves made by the Connecticut and Illinois governors, New Jersey governor Phil Murphy signed a measure that would permit licensed cannabis businesses to deduct some expenses on their state tax returns as a partial fix.
Legislators in Virginia and Iowa have also pursued similar tax relief measures for their state’s cannabis markets.
A bill that would amend the IRS code and permit state-legal cannabis businesses to take federal tax deductions that were availed to companies in other industries was also reintroduced by Representative Earl Blumenauer in Congress. At the federal level, however, cannabis businesses in legal states are still not allowed to make federal deductions under Section 280E of the Internal Revenue Code. This is primarily because marijuana remains classified as a Schedule I substance under the Controlled Substances Act.
This issue can be resolved if the DEA considered the recommendations made by the Department of Health and Human Services and reclassified cannabis under Schedule III.
These efforts to provide a measure of tax relief to cannabis companies is a step in the right direction and enterprises such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) could use the funds they save in this way to avail more product options to their customers.
About CNW420
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
To receive SMS alerts from CNW, text CANNABIS to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.CannabisNewsWire.com
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: https://www.CannabisNewsWire.com/Disclaimer
CannabisNewsWire
Denver, CO
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com
CannabisNewsWire is powered by IBN
This post was originally published by our media partner here.
