NYC Marijuana Businesses Get A Tax Break As New Cannabis Czar Focuses On Social Equity

A measure that would grant tax relief to cannabis businesses in New York City, which they are not entitled to under federal law, got the green light from the State Senate on Monday, reported Marijuana Moment.

Though obliged to pay taxes, cannabis companies do not benefit from certain federal tax deductions under the Internal Revenue Code 280E as they are viewed to be engaged in "trafficking in controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act)."

Even though Gov. Kathy Hochul signed into law a budget bill last year that carved out an exemption to allow legal cannabis companies to make tax deductions for business expenses and claim credits at the state level, operators in the Big Apple were left out as they are subject to the city's tax regulations.

The bill, S7508, from Sen. Luis R. Sepúlveda (D) addresses the issue and is heading to the State Assembly for consideration. 

This bill's summary notes that "deduction for business expenses, incurred by taxpayers authorized by the Cannabis Law to engage in the sale, distribution, or production of adult-use cannabis products or medical cannabis, for purposes of the unincorporated business tax (UBT), the general corporation tax (GCT), and the corporate tax of 2015, commonly referred to as the business corporation tax (BCT)."

NYC Mayor Eric Adams (D) "urges the earliest possible favorable consideration of this proposal by the Legislature." 

Adams, who's been at the forefront of cannabis regulation citywide, is also known for his cannabis equity efforts. In December, he named Dasheeda Dawson as the founding director of the New York City Department of Small Business Services (SBS) Cannabis NYC initiative and NYC's cannabis czar.

Equitable Environment For Cannabis Startups

Dawson gave the keynote at the three-day Cannabis World Congress & Business (CWCB) Exposition in New York's Jacob Javits Center, reported Forbes.

She plans to make cannabis into an industry that "allows social equity businesses to scale while significantly maintaining their ownership as leaders, innovators, and changemakers."

To that end, the agency she represents will partner this summer with the Mayor's Office of Equity, NYC Sheriff's Office, Administration for Children's Services, Dept. of Health and Mental Hygiene and the NYC Housing Authority.

"We aren't just helping people start a cannabis-related business," Dawson said. "We are helping people understand the plan to tap into its agricultural, medicinal, nutritional, industrial and spiritual utilities."

Photo: Courtesy of NikolayFrolochkin and ganjaspliffstoreuk by Pixabay