New York State’s (NYS) 2023 budget contains an unprecedented opportunity for cannabis businesses to save significant tax dollars, starting next year. A provision within the budget decouples the state tax code from Section 280E, which limits the federal tax benefits that cannabis businesses can claim.
This means that NYS cannabis business owners will no longer be prohibited from deducting cannabis-related business expenses on the state level, even though the deductions are still restricted under federal law. The change takes effect on January 1, 2023.
This development is welcome news for business owners entering the adult-use cannabis space in NYS and already facing other significant obstacles, such as social equity requirements, cash flow challenges, lending restrictions and 280E federal restrictions.
Grassi’s Cannabis Advisors can guide you through every challenge and available tax savings strategy on the state and federal level. Please contact John Pellitteri, Cannabis Practice Leader, for a complimentary consultation.