New Jersey lawmakers approved legislation Feb. 27 that would provide tax relief to the cannabis industry, sending the proposal to Gov. Phil Murphy for his signature.
The New Jersey Assembly passed A3946 Monday in a 59-8 vote after the Senate approved it 32-3.
The legislation, sponsored by Assemblymember Annette Quijana, decouples state tax provisions from the federal prohibition on cannabis business deductions, which will ultimately allow businesses to deduct certain expenses on their state tax returns.
New Jersey voters approved adult-use cannabis legalization in the November 2020 election and commercial sales launched in April 2022.
Cannabis businesses in the state—and elsewhere across the country—are currently unable to deduct business expenses from their state and federal tax returns due to cannabis’s status as a Schedule I substance under the Controlled Substances Act.
If Murphy signs A3946 into law, it will “apply to taxable years beginning on or after January 1 following enactment,” according to the bill’s text.
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