Legislation filed today in the New York State Senate would create a refundable tax credit for cannabis processors who incurred costs under the state’s potency-based tax in 2023.
Senate Bill 7838, sponsored by Senator Christopher Ryan, was referred to the Senate Investigations and Government Operations Committee. The bill would amend the state tax law by adding Section 496-f, titled the “Cannabis Processor Credit.”
Under the proposed legislation, licensed cannabis processors would be eligible for a refundable credit equal to three times the amount they paid in cannabis potency taxes during the 2023 calendar year. The credit would be capped at $400,000 per taxpayer.
To qualify, a processor must be licensed under New York law, subject to tax under Article 9-A or 22 of the tax code, and must have produced concentrated cannabis or cannabis edible products sold to at least one licensed retailer in 2023. The bill defines “licensed processor” and “licensed retailer” using definitions from the existing cannabis law.
Processors would be required to file or have filed returns documenting their 2023 cannabis potency tax liability. Any outstanding tax owed would be deducted from the total credit before disbursement.
For partnerships or New York S corporations, the aggregate credit claimed by all partners or shareholders would not be permitted to exceed the $400,000 cap.
If enacted, the bill would take effect immediately and apply to taxable years beginning on or after January 1, 2025.
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