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Under the Internal Revenue Service (IRS) code 280E, the marijuana industry remains blocked from taking federal deductions, which precludes entities that illegally sell Schedule I or II drugs from key tax deductions in their federal filings.
However, as partial relief, the New Jersey Assembly in a 59-8 vote passed a bill (in its final form) that would allow licensed cannabis businesses to deduct certain expenses on their state tax returns. Now, the measure heads to Gov. Phil Murphy (D)’s office for consideration.
What’s In The ‘Partial Remedy’ Legislation?
For the purposes of New Jersey’s tax code, a licensed cannabis company’s gross income “shall be determined without regard to section 280E of the [federal] Internal Revenue Code,” reads the legislation. And continued “shall apply to taxable years beginning on or after January 1 following enactment.”
Sponsored by Assemblymember Annette Quijano (D), the bill “was approved by the Senate in a vote of 32-3 following no debate or discussion on the floor,” as first reported by Marijuana Moment.
Last year, the measure was amended in the Assembly Oversight, Reform, and Federal Relations Committee. At that time, its members agreed to remove a previous provision that would have made only cannabis license holders with gross receipts less than $15 million eligible for state tax deductions.
According to the Office of Legislative Services (OLS), “providing access to these deductions and credits may also help generate more economic activity by cannabis businesses,” and so “the State and local governments that tax cannabis businesses might indirectly realize an indeterminate amount of additional annual revenue.”
Benzinga’s Cannabis Capital Conference Is Back
The most successful cannabis business event in the world, the Benzinga Cannabis Capital Conference, returns to Miami for its 16th edition. This is the place where DEALS GET DONE, where money is raised, M&A starts, and companies meet investors and key partners. Join us at the Fontainebleau Miami Beach Hotel in Florida on April 11-12. Don’t miss out. Secure your tickets now. Prices will go up soon.
Image Credits: JSmed, 7raysmarketing by Pixabay Edited By Benzinga
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Image and article originally from www.benzinga.com. Read the original article here.