New Jersey bill to give cannabis businesses tax breaks advances

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The Garden State might be ready to give cannabis entrepreneurs a little economic relief

Licensed cannabis businesses in New Jersey are now eligible for several tax breaks thanks to a bill recently passed in the state Assembly. As a result, these businesses will be able to deduct certain expenses on their state income tax returns. It appears to be a partial remedy as the industry continues to be blocked from taking federal deductions under the Internal Revenue Service (IRS) code known as 280E.

Annette Quijano was the Assemblywoman in charge of bringing this legislation to life. Fortunately for them and many other stakeholders, the measure passed overwhelmingly last Thursday in a 60-6 vote. The green light comes about a month after it advanced through the amendments committee.

While many state-level tax policies simply mirror what federal law states, this new legislation says the gross receipts of a licensed marijuana business “shall be determined without regard to section 280E of the [federal] Internal Revenue Code.” Even so, it is worth noting that these businesses would still be subject to IRS Code 280E, which does not allow entities that illegally sell Schedule I or II drugs to take various key tax deductions on their federal filings.

Should the bill be enacted into law by the end of the day in the Garden State, the licensed marijuana industry could at least see some relief at the state level. Quijano assured that the measure “will apply to fiscal years beginning on or after January 1 following enactment.” The Office of Legislative Services (OLS) applauded the move, saying this access to deductions may also help generate more economic activity by marijuana businesses.