Illinois, Minnesota Detach From Cannabis Industry Tax Penalty

Cannabis businesses operating in Minnesota and Illinois will be able to write off ordinary business expenses under legislation removing both states from federal tax rules prohibiting such tax benefits.

Minnesota Gov. Tim Walz (D) signed a bill Tuesday legalizing adult-use cannabis. The new law creates a regulatory framework and tax system around recreational marijuana, but also removes the state’s tax regime from business expense restrictions embedded in tax code Section 280E.

Language decoupling Illinois from Section 280E was folded into the state’s fiscal year 2024 budget bill, HB 3817, which won final legislative approval ...