 New York Senator Jeremy Cooney has stepped up to support the cannabis industry with a proposal to alleviate some of their tax burden.
State Bill S.7518, would allow cannabis businesses to deduct ordinary and necessary business expenses on their state tax returns. Senator Cooney hopes this will encourage small business growth, and prevent larger corporations from dominating the state’s brand new-adult use cannabis market. NY recently legalized recreational adult-use cannabis with the Marijuana Regulation and Taxation Act (MRTA). However, current federal tax rules, specifically section 280E, prohibits cannabis businesses from making normal business deductions such as rent, employee payroll, insurance, and so much more. Basically, a cannabis business can’t deduct any expense except the basic “cost of goods”. Not being able to deduct normal business expenses means that a cannabis company could effectively end up paying as much as 80% of their revenue to taxes. Not many businesses can survive this, except those funded by large corporations or venture capital. Senator Cooney says, “I am proud to sponsor legislation that will create a more equitable taxation system to allow more small business owners and entrepreneurs to participate in the new cannabis market.” Comments are closed.
|
RSS Feed