Rhode Island Governor Proposes Tax Reforms to Benefit Cannabis Industry

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Summary

State and federal taxes could soon be separated for US cannabis industry operators, a move set in motion by Dan McKee. Should Governor McKee’s proposal pass and set a precedent for other states, the benefits could extend beyond individual cannabis operators. Challenges Facing the Cannabis Industry Due to IRS Code 280E Since cannabis remains illegal at the federal level in the United States, the industry continues to grapple with multiple challenges. According to estimates, this separation would result in massive savings for cannabis operators: roughly $824,642 in fiscal year 2025 and as much as $1.7 million in fiscal year 2026. Awaiting Federal Action on the Legal Status of Cannabis The future of the US cannabis industry hinges mainly on the stance taken by the Biden Administration.

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State and federal taxes could soon be separated for US cannabis industry operators, a move set in motion by Dan McKee. By addressing the restrictive Internal Revenue Service (IRS) code 280E, which prevents companies involved with federally prohibited substances from taking standard business tax deductions, this proposal aims to provide tax relief for the multimillion-dollar cannabis industry.

How This Tax Reform Could Save the Cannabis Industry Millions

Through his budget proposal for fiscal year 2025, Governor McKee has outlined his intention to follow the footsteps of Massachusetts, Connecticut, and at least...

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