Senate Counsel, Research
and Fiscal Analysis
Minnesota Senate Bldg.
95 University Avenue W. Suite 3300
St. Paul, MN 55155
(651) 296-4791
Tom Bottern
Director
   Senate   
State of Minnesota
 
 
 
 
 
S.F. No. 265 - Subtraction for medical cannabis manufacturers (as proposed to be amended by A-1 amendment)
 
Author: Senator Roger C. Chamberlain
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: March 6, 2018



 

As proposed to be amended, this bill establishes a subtraction for purposes of calculating Minnesota individual income, corporate franchise, and alternative minimum tax for business expenses incurred by medical cannabis manufacturers. Business expenses, such as wages and rent, are generally deductible at the federal level for purposes of calculating federal taxable income, and Minnesota incorporates these deductions in calculating Minnesota taxable income. Federal law, however, prohibits the deduction for expenses incurred in a trade or business consisting of trafficking in controlled substances that are prohibited by federal law. Cannabis is a controlled substance. Thus, the deduction does not flow through to Minnesota taxable income. This bill would allow a subtraction for the federally disallowed expenses.

Section 1 allows the subtraction for the individual income tax; section 2 allows the subtraction for the corporate franchise tax; and section 3 allows the subtraction for purposes of calculating alternative minimum tax.

Effective beginning in tax year 2018.   

 
Check on the status of this bill
 
Back to Senate Counsel and Research Bill Summaries page
 

 
This page is maintained by the Office of Senate Counsel, Research, and Fiscal Analysis for the Minnesota Senate.
 
Last review or update: 03/06/2018
 
If you see any errors on this page, please e-mail us at webmaster@senate.mn