The governor of New Jersey has signed a bill into law that will allow licensed marijuana businesses to deduct certain expenses on their state tax returns—a partial remedy as the industry continues to be blocked from making federal deductions under Internal Revenue Service (IRS) code known as 280E.
Gov. Phil Murphy (D) signed off on the legislation from Assemblymember Annette Quijano (D) on Monday, without a formal ceremony. This comes about three months after the legislature approved the measure with amendments.
While many state tax policies simply mirror federal law, the legislation says that, for the purposes of the New Jersey’s tax code, a licensed cannabis business’s gross income “shall be determined without regard to section 280E of the [federal] Internal Revenue Code.”
When it comes to federal tax policy, those businesses will still be subject to the IRS 280E code, which precludes entities that illegally sell Schedule I or II drugs from making key tax deductions in their federal filings. But under the New Jersey law, the licensed cannabis industry will at least see some state-level relief.
The legislation Murphy signed “shall apply to taxable years beginning on or after January 1 following enactment,” it says.
“The continued implementation of
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