Illinois Gov. J.B. Pritzker announced June 7 that he signed the state’s fiscal year 2024 budget into law, including a provision that will provide tax relief to Illinois’ licensed cannabis businesses.
Both chambers of the state Legislature voted May 27 to send the budget bill to Pritzker’s desk.
The legislation, H.B. 3817, allows Illinois’ cannabis businesses to take state tax deductions that are currently prohibited at the federal level due to IRS code 280E.
The budget bill also includes a cannabis-related provision that directs funding to a cannabis development fund, as well as language that extends a deadline for conditional retail licensees to locate a brick-and-mortar location, according to Marijuana Moment, which first reported the news.
“As a Chicago-based company, we commend Gov. Pritzker, Senate President [Don] Harmon, House Speaker [Emanuel Chris] Welch and Illinois officials for their dedication in severing the archaic Section 280E from the federal tax code, allowing cannabis businesses to deduct taxes just like enterprises and organizations that operate in any other industry,” James Leventis, EVP of legal, regulatory, and government affairs for Verano, said in a public statement Wednesday. “By eliminating 280E, cannabis entrepreneurs, social equity groups and cannabis operators across Illinois will now have the opportunity to fairly leverage their deductions and improve their ability to access capital, invest and grow their businesses in an expanding industry. We’re encouraged by the progress we’ve seen on the state level regarding 280E and are hopeful to see future movement at the federal level to allow the cannabis industry to reach its full economic and social potential.”
The move follows New Jersey Gov. Phil Murphy signing similar legislation into lawthis legislative session that allows that state’s licensed cannabis businesses to deduct certain expenses on their state tax returns.
Meanwhile, at the federal level, lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in April to allow federally regulated financial institutions to work with state-legal cannabis businesses.