CA Cannabis Income Tax and Sec 280E - Spidell

CA Cannabis Income Tax and Sec 280E

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Message Board CA Cannabis Income Tax and Sec 280E

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    • #185796
      Bruce Critchley
      Participant

      It appears that CA complies with Sec 280E, which prohibits deduction from income of all expenses other than Cost of Goods Sold for businesses in the cannabis industry. I’m having trouble finding definitive information, but it looks as if this does not apply to corporations. I’m guessing that means C Corps only, and not S Corps.

      Can someone confirm whether California corporations are subject to IRS 280E?

       

    • #185869
      Lynn Freer
      Participant

      The answer is in our Analysis and Explanation of California Taxes 21-301 Trade or business expenses Sec. 21-301 Trade or business expenses

      CA has never conformed to 280E for corporations – either C or S. For years beginning 1/1/20 280E doesn’t apply for individual tax purposes

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