Assemblymember Jones-Sawyer, Sr.'s Bill that Allow State Cannabis Business Deductions Heads to the Senate

Friday, May 24, 2019

Assemblymember Jones-Sawyer, Sr.’s Bill that Allow State Cannabis Business Deductions Heads to the Senate

(Sacramento – May 23, 2019) – This week the California State Assembly voted 69-1 to approve Assemblymember Jones-Sawyer, Sr.’s (D- South Los Angeles) Assembly Bill (AB) 37, legislation that allows legal cannabis businesses to deduct ordinary and necessary business expenses.

“Due to anti-drug trafficking policies at the federal level, legal cannabis businesses in California are not able to make any deductions when paying taxes, resulting in higher tax rates than any other type of legal business in California,” said Assemblymember Jones-Sawyer. “AB 37 will end the cannabis prohibition on state tax deductions, allowing the legal cannabis industry to thrive.  I am proud the Assembly voted to pass AB 37 and I look forward to working with my colleagues in the Senate,” said Assemblymember Jones-Sawyer Sr.   

Under current law, tax deductions that businesses are entitled to include: rent, salaries, employee benefits, utilities, payments to contractors, marketing, repairs and office expenses. All legitimate expenses incurred while conducting business are tax deductible expenses and the legal cannabis industry should not be an exception.

AB 37 is an important bill that will help achieve the state’s policy objective to incentivize illicit operators to enter the new regulated system by providing much needed tax relief,” said Lindsay Robinson, Executive Director of the California Cannabis Industry Association. “We look forward to continuing the fight for AB 37 as it makes its way through the Senate.

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Assemblymember Reginald Byron Jones-Sawyer, Sr. represents South Los Angeles, Florence-Firestone, Walnut Park, and a portion of Huntington Park. For more information about Assemblymember Jones-Sawyer, Sr., please visit https://a59.asmdc.org/