Senate Counsel, Research
and Fiscal Analysis
Minnesota Senate Bldg.
95 University Avenue W. Suite 3300
St. Paul, MN 55155
(651) 296-4791
Tom Bottern
State of Minnesota
S.F. No. 319 - Subtraction for medical cannabis manufacturers (as proposed to be amended by A-1)
Author: Senator Roger C. Chamberlain
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: January 31, 2019


Under current law, 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, such as medical cannabis, that are prohibited by federal law. Thus, the deduction does not flow through to Minnesota taxable income. As proposed to be amended, this bill would allow a subtraction for the federally disallowed expenses for purposes of calculating Minnesota income tax, corporate franchise tax, and alternative minimum tax.

Section 1 allows the subtraction from individual income tax; Section 2 allows the subtraction from corporate franchise tax; and Sections 3 and 4 allow the subtraction for purposes of calculating alternative minimum tax.

Effective beginning in tax year 2019.   


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: 01/31/2019
If you see any errors on this page, please e-mail us at