Roughly five months after its initial approval in the Senate, a New York bill to allow marijuana businesses to take standard state tax deductions has been delivered to Governor Kathy Hochul.
Filed by Senator Luis Sepulveda, Senate Bill 7508 was passed by the full Senate 43 to 18, and the full Assembly 116 to 29. Today the measure was sent to Governor Hochul for consideration.
Governor Hochul now has the option of signing the measure into law, allowing it to become law without a signature, or veto it. If Governor Hochul chooses the latter (she has 10 days to decide), the legislature could override the veto with a 2/3rds majority.
If Senate Bill 7508 does become law, as is expected, it will alter the state’s existing tax code to allow marijuana businesses to take deductions for an amount equal to the deductions that are 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.
The text of SB 7508 states:
“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.”
The full text of SB 7508 can be found by clicking here.
