Missouri Gov. Mike Parson (R) on Friday vetoed a measure that would have, in part, allowed the state’s medical cannabis companies to deduct normal business expenses on their taxes, the Missouri Independent reports.
In his veto message, the governor didn’t mention the medical cannabis tax provisions, rather he said the veto was due to a section that would have provided tax relief to businesses impacted by city-wide or county-wide public health restrictions which have created “significant unintended consequences that could greatly harm localities.”
The bill, which passed the Legislature in May, would have allowed the state’s medical cannabis companies to deduct normal business expenses on state tax returns. Such deductions are not allowed on federal returns due to federal cannabis prohibition.
Andrew Mullins, executive director of MoCannTrade, told the Independent that the organization is “disappointed by the veto” but that members “remain encouraged by the overwhelming bipartisan support for a measure of basic tax fairness that received near-unanimous votes in both the state House and Senate.”
“As our state’s newest industry continues to create thousands of new jobs and generate tens of millions in new spending each month, we look forward to again passing this policy change and seeing it signed into law.”—Mullins to the Independent
The law was the first in the nation to approve such reforms despite Missouri only legalizing cannabis in 2018.
Section 280E of the federal tax code does not allow “any trade or business…that consists of trafficking controlled substances” to deduct normal business expenses, whether or not their business is approved by the state.
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