Michigan Court of Appeals Denies Tax Deductions for Medical Marijuana Facilities

The Michigan Court of Appeals affirmed the Court of Claims’ decision that medical marijuana facilities are not entitled to deduct ordinary and necessary business expenses under the Michigan Regulation and Taxation of Marihuana Act (MRTMA). The dispute arose when the taxpayer, a medical marijuana facility, claimed deductions for ordinary business expenses on its tax returns, which the Department of Treasury disallowed. The court reasoned that the MRTMA’s definition of “marihuana establishment” does not include medical marijuana facilities licensed under the Medical Marihuana Facilities Licensing Act. Therefore, the tax deduction provision does not apply to them. The court emphasized that the ...