Legislation filed today in the New York Senate would allow marijuana businesses that are legal under state law to take tax deductions that they otherwise would be able to take if they weren’t considered to be federally illegal entities.
New York Senate Bill 7508 would alter the state’s existing tax code to allow marijuana businesses to take deductions for an amount equal to the deductions that were disallowed under Section 280E of the Internal Revenue Code for the taxable year. Section 280E explicitly disallows businesses that are illegal under federal law, even if they’re legal under state law, from taking standard tax deductions.
Senate Bill 7508 was filed by Senator Luis Sepulveda, and has been referred to the Senate Rules Committee.
The bill states that:
“For businesses authorized pursuant to the cannabis law to engage in the sale, production, or distribution of (A) adult-use cannabis products, as defined in article twenty-C of the tax law, or (B) medical cannabis, as defined in section three of the cannabis law, the amount of any federal deduction disallowed pursuant to section two hundred eighty-E of the internal revenue code related to the sale, production, or distribution of such adult-use cannabis products or such medical cannabis not used as the basis for any other tax deduction, exemption, or credit and not otherwise required to be added back by subdivision (b) of this section in computing entire net income.”
For the full text of this measure, click here.