NY State Senate Bill 2021-S7518

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 07, 2022	reference changed to budget and revenue
Jan 05, 2022	referred to rules
Nov 12, 2021	referred to rules

2021-S7518 (ACTIVE) - Details

See Assembly Version of this Bill:: A8808
Current Committee:: Senate Rules
Law Section:: Tax Law
Laws Affected:: Add §493-a, Tax L

2021-S7518 (ACTIVE) - Summary

Permits deductions for commercial cannabis activity including the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products, or acting as the holder of an adult-use on-site consumption license.

2021-S7518 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S7518

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the tax law, in relation to permitting deductions for
commercial cannabis activity; and providing for the repeal of such
provisions upon expiration thereof

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one allows licensed cannabis businesses to deduct ordinary and
necessary business expenses.

Section two provides the effective date.

 
JUSTIFICATION:

Due to section 280E of the Internal Revenue Code, legal cannabis busi-
nesses in New York will not be allowed to make any deductions when
paying state taxes. This means they have to pay more taxes than other
legal businesses in the state. Not being able to make ordinary and

necessary business deductions significantly increases the costs of doing
business and creates a larger barrier to entry. New York legalized
adult-use cannabis with the focus on providing equitable opportunities
to those most impacted by the prohibition. New York cannot realize the
goals set in the MRTA for social and economic equity if the cost of
doing business prevents the equity candidates from actually participat-
ing. The effective tax rate on cannabis businesses would be approximate-
ly double what any other business has to pay. If this goes unchanged,
people will be unable or unwilling to leave the legacy market for a
licensed business.

This bill will provide tax equity to the emerging cannabis industry by
allowing licensed cannabis businesses to make ordinary and necessary
deductions on their New York state taxes. Additionally, it ensures the
adult-use cannabis market will not be dominated solely by large multi-
state operators who can afford to pay the higher effective tax rate.
 
PRIOR LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S7518 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7518
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             November 12, 2021
                                ___________
 
 Introduced  by  Sen.  COONEY -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the tax law, in relation to  permitting  deductions  for
   commercial  cannabis  activity;  and  providing for the repeal of such
   provisions upon expiration thereof

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  tax  law is amended by adding a new section 493-a to
 read as follows:
   § 493-A. DEDUCTIONS. (A) FOR EACH TAXABLE YEAR BEGINNING ON  OR  AFTER
 JANUARY  FIRST,  TWO  THOUSAND TWENTY-TWO, AND BEFORE JANUARY FIRST, TWO
 THOUSAND TWENTY-FIVE, THE PROVISIONS OF SECTION  280E  OF  THE  INTERNAL
 REVENUE  CODE,  RELATING  TO EXPENDITURES IN CONNECTION WITH THE ILLEGAL
 SALE OF DRUGS, SHALL NOT APPLY FOR THE PURPOSES OF THIS CHAPTER  TO  THE
 CARRYING  ON OF ANY TRADE OR BUSINESS THAT IS COMMERCIAL CANNABIS ACTIV-
 ITY BY A LICENSEE.
   (B) FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING DEFINITIONS  SHALL
 APPLY:
   (1)"COMMERCIAL    CANNABIS   ACTIVITY"   INCLUDES   THE   CULTIVATION,
 POSSESSION, MANUFACTURE, DISTRIBUTION, PROCESSING,  STORING,  LABORATORY
 TESTING,  PACKAGING,  LABELING,  TRANSPORTATION,  DELIVERY,  OR  SALE OF
 CANNABIS AND CANNABIS PRODUCTS, OR ACTING AS THE HOLDER OF AN  ADULT-USE
 ON-SITE  CONSUMPTION  LICENSE  PURSUANT  TO ARTICLE FOUR OF THE CANNABIS
 LAW.
   (2) "LICENSEE" SHALL HAVE THE SAME MEANING AS DEFINED IN SECTION THREE
 OF THE CANNABIS LAW.
   § 2. This act shall take effect on the  same  date  and  in  the  same
 manner  as  section  39 of chapter 92 of the laws of 2021, takes effect,
 and shall expire January 1, 2025 when upon such date the  provisions  of
 this act shall be deemed repealed.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13586-01-1

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Senate Bill S7518

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

2021-S7518 (ACTIVE) - Details

2021-S7518 (ACTIVE) - Summary

2021-S7518 (ACTIVE) - Sponsor Memo

2021-S7518 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7518

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Sponsored By

Jeremy A. Cooney

Archive: Last Bill Status - In Senate Committee Rules Committee

2021-S7518 (ACTIVE) - Details

2021-S7518 (ACTIVE) - Summary

2021-S7518 (ACTIVE) - Sponsor Memo

2021-S7518 (ACTIVE) - Bill Text download pdf

Comments