California cannabis business owners will be able to deduct business expenses on their state income tax returns starting in 2020.
Gov. Gavin Newsom (D) signed A.B. 37 by Assemblyman Reggie Jones-Sawyer (D) Oct. 12, allowing the state-level deduction for cannabis business owners filing as sole proprietors or partnerships. A federal deduction isn’t allowed because marijuana is still illegal at the federal level.
- The deduction could cost the state tens of millions of dollars annually, but lack of historical data makes estimates difficult, according to the Franchise Tax Board.
- The deduction will expire in 2025
- California legalized marijuana for recreational...