A New Jersey Senate committee approved a pair of bills on Thursday that would allow licensed cannabis 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 Senate Budget and Appropriations Committee took up companion measures from its chamber and from the Assembly, making them identical before advancing them in a unanimous vote.
The version from Assemblymember Annette Quijano (D) passed that full chamber in October. It was previously amended in committee, with members agreeing to remove an earlier provision that would’ve made it so only cannabis licensees with gross receipts less than $15 million would be eligible for state tax deductions. The Senate version was amended on Thursday to include those Assembly revisions before both were approved together.
While many state tax policies simply mirror federal law, the legislation says that, for the purposes of 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.”
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