Lawmakers in New Jersey have passed a measure allowing marijuana businesses to use a partial 280E workaround to claim state tax deductions.
Even though federal deductions for the marijuana sector remain prohibited by Internal Revenue Service (IRS) code 280E, the New Jersey Assembly has advanced a bill that would allow licensed marijuana businesses to deduct some expenses on state tax returns.
About a month after passing through the committee with revisions, Assemblymember Annette Quijano’s (D) proposal passed the house with a 60-6 vote, according to a report by Marijuana Moment.
As far as the federal tax policy is concerned, those enterprises would still be subject to the IRS 280E regulation, which disallows important tax deductions for entities who illegally sell Schedule I or II medications. But if the New Jersey measure passes, at least the state level could provide some respite for the regulated cannabis sector.
The law “must apply to taxable years starting on or after January 1 after enactment,” according to a report in 420NJEvents.
According to a budget report published, the bill is anticipated to have ambiguous effects on the economy.