Amendment #9 to H5562

280E Cannabis Taxation Technical Correction

Mr. Donahue of Worcester moves to amend the bill by adding the following section:

Section XX.  Paragraph 4 of Section 30 of Chapter 63 is hereby amended by inserting after the words “but for Section 280E of said Code” the following –

For purposes of this clause, in the case of a taxpayer required to file a combined report pursuant to section 32B, where one or more members of the combined group is a marijuana establishment licensed pursuant to chapter 94G or a medical marijuana establishment licensed pursuant to chapter 94I, the phrase “carrying on the trade or business of a marijuana establishment” or “carrying on the trade or business of a medical marijuana establishment” shall be determined at the unitary business level.

Amounts paid or incurred by any member of the combined group during the taxable year in carrying on the trade or business of such unitary cannabis enterprise shall be treated as amounts paid or incurred in carrying on such trade or business for purposes of this clause, without regard to whether the member that recorded such amounts is the member that holds the license. The deduction allowed by this clause shall be reflected in computing the combined group’s taxable net income under this chapter prior to the application of the combined group’s apportionment percentage pursuant to section 32B and regulations thereunder, and no separate state-by-state segmentation or multiple concurrent apportionment treatments shall be used within a single combined report to implement this clause.

Notwithstanding any general or special law to the contrary, this act shall apply to all taxable years beginning on or after January 1, 2022, and shall apply to all open taxable years to which the amendment of chapter 63, section 30 by chapter 180 of the acts of 2022 applies. It is the intent of the General Court that this act clarify the application of existing law to taxpayers filing a combined report, and not change substantive tax policy as heretofore enacted.