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Cannabis Income Tax Subtraction
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Licensed cannabis or hemp businesses and medical cannabis manufacturers may qualify to subtract expenses that were not allowed on the federal return.
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For tax years beginning after December 31, 2022, the subtraction was expanded to include non-medical licensed cannabis or hemp businesses.
Licensed cannabis businesses are allowed the cannabis income tax subtraction for expenses that were not allowed on your federal return under Internal Revenue Code, section 280E. The expenses must be related to the business of cannabis or hemp.
To qualify, you must be a licensed cannabis or hemp business with the Office of Cannabis Management.
For tax years beginning after December 31, 2018, medical cannabis manufacturers are allowed the cannabis income tax subtraction for expenses that were not allowed on your federal return under Internal Revenue Code, section 280E. The expenses must be related to the business of medical cannabis.
There are no Minnesota Cost of Goods Sold (COGS) income tax additions allowed for cannabis businesses. The amount of COGS reported for federal purposes is included for Minnesota purposes.
