The New Jersey Assembly has approved a bill that would 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.
The legislation from Assemblymember Annette Quijano (D) cleared the chamber in a 60-6 vote on Thursday, about a month after it advanced through committee with amendments.
While many state tax policies simply mirror federal law, the new bill 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 would 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 if the New Jersey bill is enacted, the licensed cannabis industry could at least see some state-level relief.
The legislation “shall apply to taxable years beginning on or after January 1 following enactment,” it says.
A fiscal analysis released earlier this month found that the bill
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