New York State to allow state tax deductions for legal cannabis companies

new-york-state-to-allow-state-tax-deductions-for-legal-cannabis-companies

Legal cannabis companies would be allowed for the first time to deduct ordinary business expenses on their state taxes under a budget agreement reached Thursday by New York State lawmakers. This would put cannabis companies on equal tax ground with all other businesses in the state, at least in terms of their New York income taxes. New York State Gov. Kathy Hochul and leaders of the state’s Assembly and Senate announced a framework to allow those deductions for state purposes for taxable years beginning on or after Jan. 1, according to a spokesperson for the governor. Since cannabis remains a Schedule I illegal substance under federal law, cannabis businesses are not allowed to deduct expenses on federal returns. This 280E exemption on claiming ordinary business tax deductions has impacted legal cannabis companies, including small and medium sized businesses, lawmakers said. The New York State measure will allow those deductions for state purposes. The AdvisorShares Pure US Cannabis ETF MSOS, -0.95% fell 0.2% on Friday. It’s down 22.3% so far in 2022, compared to a loss of 11.6% by the Nasdaq.

Source: Marketwatch

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