The governor of Maine has signed a bill to allow licensed marijuana businesses to take state tax deductions as a partial workaround to the Internal Revenue Service (IRS) code known as 280E that prohibits such deductions at the federal level.
Gov. Janet Mills (D) gave final approval to the legislation from Sen. Teresa Pierce (D) last week. It expands on an existing policy that already provided tax relief for operators in the state’s medical cannabis industry.
Under the newly enacted law, the state will use part of the tax revenue it receives from marijuana sales to make up for lost revenue resulting from the new tax deductions that will be available for “business expenses related to carrying on a trade or business as a registered caregiver, a registered dispensary or a manufacturing facility,” as well as “a cannabis establishment or testing facility” as of January 1.
The deductions would be for “an amount equal to the deduction that would otherwise be allowable under this Part to the extent that the deduction is disallowed under the Code, Section 280E,” the bill text says.
“The contrast in the tax code is appalling. The effective tax rate for businesses able to write off
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