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What’s In The ‘Partial Remedy’ Legislation?
For the purposes of New Jersey’s tax code, a licensed cannabis company's gross income “shall be determined without regard to section 280E of the [federal] Internal Revenue Code," reads the legislation. And continued “shall apply to taxable years beginning on or after January 1 following enactment.”
Sponsored by Assemblymember Annette Quijano (D), the bill "was approved by the Senate in a vote of 32-3 following no debate or discussion on the floor," as first reported by Marijuana Moment.
A New Jersey Senate committee approved a pair of bills on Thursday that would allow licensed marijuana 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.
Under the Internal Revenue Service (IRS) code 280E, the marijuana industry remains blocked from taking federal deductions, which precludes entities that illegally sell Schedule I or II drugs from key tax deductions in their federal filings.
However, as partial relief, the New Jersey Assembly passed a bill that would allow licensed cannabis businesses to deduct certain expenses on their state tax returns. The legislation, introduced by Assemblymember Annette Quijano (D) passed the House in a 60-6 vote.
New Jersey's Cannabis Regulatory Commission has had the somewhat unenviable task of overseeing the debut of recreational-use marijuana sales in the state, but after three months some areas of concern are emerging.
And there don't seem to be ready-made answers, according to Todd Polyniak, who leads the cannabis practice for Parsippany-based firm Sax, LLC and works with clients who have applied for recreational retail licenses.