The Deduction of Cannabis Business Expenses Following New York’s 2023 Budget – JD Supra

In fact, it is the largest spending bill ever to have been enacted by Albany.

Of course, as is often the case, the Budget also contains other measures that are more industry specific.

To date, the arguments proffered by cannabis businesses and their owners have not been successful.

However, the economic impact of the Federal denial or disallowance of such deductions does not end with the IRS.

The stated purpose for the revision was to simplify tax return preparation, improve compliance and enforcement, and aid in the interpretation of tax law provisions.

However, New York’s Tax Law does not conform to the Code in all respects.

280E does not preclude a taxpayer from taking an expense into account in its COGS in determining the taxpayer’s profits from the sale of a product.

51 work opportunity tax credit for wages paid or incurred in carrying on a business of trafficking in marijuana.

For example, New York elected not to conform to parts of the 2017 Tax Cuts and Jobs Act .

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