MISSOURI – Marijuana companies will be allowed to deduct business expenses on their state taxes when filing their Missouri state tax returns in 2023.
This option became available to businesses for the first time after the passage of Amendment 3 last year. It’s available for the 2022 tax year and beyond.
The Missouri Department of Revenue shares the following insight:
“The Marijuana Business Deduction is a subtraction from a taxpayer’s federal adjusted gross income in determining the taxpayer’s Missouri adjusted gross income for the amount that is eligible to be claimed as a federal income tax deduction but is disallowed by section 280E of the Internal Revenue Code. This deduction is exclusively limited to taxpayers authorized to do business under Article XIV of Missouri’s Constitution.”
On their state tax returns, Missouri marijuana businesses can now claim business deductions, like selling expenses, marketing expenses, and corporate overhead.
“In general, this is a very good thing for Missouri licensed marijuana operators because it allows them to operate under a similar tax environment as any other legal business operating in our state,” said David Smith, president of Smith Patrick CPAs and treasurer of the Missouri Cannabis Trade Association via a news release.
Smith also notes, if a typical dispensary has $500,000 of expenses disallowed because of the 280E provision at the Federal level, Missouri’s new law could help the dispensary save around $25,000.
Missouri DOR says eligible companies must fill out several forms and attach documentation to deduct certain expenses. For more information on that process, click here.