New York Governor Kathy Hochul has vetoed Assembly Bill 10196, which sought to allow licensed marijuana cultivators and processors the option to pay the state’s 9% excise tax annually instead of quarterly.
Introduced in May by Assemblymember Donna Lupardo, the bill passed the Assembly with a vote of 117 to 27 and the Senate with a vote of 52 to 9. It was sent to Governor Hochul’s desk on December 12 but was vetoed this week.
Under current law, cannabis growers and processors must file quarterly tax returns, with payments due on the 20th day of the month following each quarterly period. Assembly Bill 10196 proposed amending Section 495 of the state’s tax law to allow distributors to opt for annual electronic tax filings and payments. The change would have taken immediate effect upon enactment.
Despite strong legislative support, Hochul’s veto means cannabis businesses will continue to adhere to quarterly reporting and payment schedules, maintaining the current framework established under the 2021 tax law, unless the legislature overrides the veto with a 2/3rds vote.
The veto comes as New York’s cannabis industry grapples with regulatory hurdles and financial pressures, leaving many cultivators and processors frustrated by the lack of flexibility in tax requirements. Proponents of the bill argue that annual payments could ease administrative burdens and improve cash flow for businesses navigating the nascent market.
Despite vetoing AB 10196, Governor Hochul signed Assembly Bill 1234 into law, placing marijuana within the legal definition of crops, livestock, and livestock products.
