Iowa bill allows medical cannabidiol manufacturers and dispensaries to deduct business expenses from state income taxes.

The bill amends Iowa's individual and corporate income tax laws to allow deductions for business expenses incurred by medical cannabidiol manufacturers and dispensaries. This change overrides the federal prohibition on such deductions under section 280E of the Internal Revenue Code. The bill applies retroactively to tax years beginning on or after January 1, 2026. The deduction is not allowed if the expense was not incurred by a licensed entity or violates state law.

Iowa bill allows medical cannabidiol manufacturers and dispensaries to deduct business expenses from state income taxes.

The bill amends Iowa's individual and corporate income tax laws to allow deductions for business expenses incurred by medical cannabidiol manufacturers and dispensaries. This change overrides the federal prohibition on such deductions under section 280E of the Internal Revenue Code. The bill applies retroactively to tax years beginning on or after January 1, 2026. The deduction is not allowed if the expense was not incurred by a licensed entity or violates state law.