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The governor of Illinois has signed a budget bill that includes provisions that will allow licensed marijuana businesses to take state tax deductions<\/a> that they\u2019re currently prohibited from utilizing at the federal level due to an Internal Revenue Service (IRS) code known as 280E.<\/p>\n Gov. J.B. Pritzker (D) gave final approval to the legislation\u2014which also contains language directing funding to a cannabis development fund and extends a deadline for conditional licensees to find storefronts\u2014last week.<\/p>\n A key section that\u2019s now been enacted decouples marijuana businesses from the federal tax policy, which currently bans the industry from making key deductions that are available to other traditional markets, significantly increasing the effective tax rate that they pay.<\/p>\n Signed, sealed, delivered \u2014 Governor JB Pritzker (@GovPritzker) June 7, 2023<\/a><\/p>\n<\/blockquote>\n\n A\u00a0provision<\/a>\u00a0will be added to the state\u2019s existing tax code to allow cannabis business deductions for \u201can amount equal to the deductions that were disallowed under Section 280E of the Internal Revenue Code for the taxable year\u201d as of the current tax year.<\/p>\n While lawmakers passed the budget with the handful of marijuana provisions included, separate broader cannabis omnibus legislation that would have restricted delta-8 THC products stalled ahead of the end of the session.<\/p>\n \u2014 With respect to the tax section, Illinois is joining several other states that have moved to enact rules to treat the marijuana industry like a traditional market by providing the tax relief option.<\/p>\n For example, the governor of Connecticut also signed budget legislation on Monday that includes provisions to\u00a0provide state-level tax relief<\/a> to licensed marijuana businesses as a federal 280E workaround for the industry.<\/p>\n Also,\u00a0the governor of New Jersey signed legislation<\/a> last month to allow licensed marijuana businesses to deduct certain expenses on their state tax returns as a partial IRS 280E fix. Lawmakers in Iowa<\/a>,\u00a0New York<\/a>,\u00a0Pennsylvania<\/a>\u00a0and\u00a0Virginia<\/a>\u00a0have similarly pursued tax relief for each of their state\u2019s marijuana markets.<\/p>\n The New York Senate passed a bill last week to\u00a0provide a 280E fix for New York City cannabis companies<\/a>\u00a0at the local level because the already-enacted statewide reform didn\u2019t affect the city\u2019s separate tax law.<\/p>\n At the congressional level, Rep. Earl Blumenauer (D-OR) reintroduced\u00a0a bill last month that would amend the IRS code<\/a>\u00a0to allow state-legal marijuana businesses to finally take federal tax deductions that are available to companies in other industries.<\/p>\n He told Marijuana Moment that he\u2019s \u201cabsolutely convinced when we are able to fully deduct their business expenses that\u00a0there actually will be more revenue collected<\/a>\u00a0because people will comply fully with the law.\u201d<\/p>\n For the time being, the marijuana industry continues to face tax policy challenges under the umbrella of prohibition. And as\u00a0the Congressional Research Service (CRS) noted<\/a>\u00a0in a 2021 report, IRS \u201chas offered little tax guidance about the application of Section 280E.\u201d<\/p>\n IRS did\u00a0provide some guidance in an update in 2020<\/a>, explaining that while cannabis businesses can\u2019t take standard deductions, 280E does not \u201cprohibit a participant in the marijuana industry from reducing its gross receipts by its properly calculated cost of goods sold to determine its gross income.\u201d<\/p>\n The IRS update seemed to be\u00a0responsive to a Treasury Department internal watchdog report<\/a>\u00a0that was released in 2020. The department\u2019s inspector general for tax administration had criticized IRS for failing to adequately advise taxpayers in the marijuana industry about compliance with federal tax laws. And it directed the agency to \u201cdevelop and publicize guidance specific to the marijuana industry.\u201d<\/p>\n Bipartisan and bicameral lawmakers have been working for years to pass legislation that would treat the cannabis sector like other legitimate enterprises, namely through the Secure and Fair Enforcement (SAFE) Banking Act, which\u00a0received a hearing in the Senate Banking Committee<\/a> this month and is expected to head to a markup \u201csoon.\u201d<\/a><\/p>\n Anti-Drug Group Claims Marijuana Banking Bill Would Increase Car Crashes And Hospitalizations<\/a><\/p>\n<\/blockquote>\n\n The post Illinois Governor Signs Bill Allowing Marijuana Businesses To Claim State Tax Deductions As Partial IRS 280E Fix<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n
The governor of Illinois has signed a budget bill that includes provisions that will allow licensed marijuana businesses to take state tax deductions that they\u2019re currently prohibited from utilizing at the federal level due to an Internal Revenue Service (IRS) code known as 280E. Gov. J.B. Pritzker (D) gave finalContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":458,"featured_media":65923,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[18,81],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/65922"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/458"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=65922"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/65922\/revisions"}],"predecessor-version":[{"id":65924,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/65922\/revisions\/65924"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media\/65923"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=65922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=65922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=65922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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\nRead More: Illinois Governor Signs Bill Allowing Marijuana Businesses To Claim State Tax Deductions As Partial IRS 280E Fix<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"