Relating to medical cannabidiol by providing deductions from the individual and corporate income taxes for expenses incurred by medical cannabidiol manufacturers and dispensaries, and exempting the sale of medical cannabidiol products from the sales and use tax, and including retroactive applicability provisions

DIVISION I. Under federal law, a medical cannabidiol manufacturer and a medical cannabidiol dispensary are prohibited from taking business expense deductions by section 280E of the Internal Revenue Code. Currently, Iowa computes individual net income and corporate taxable income based upon federal income calculations, and therefore Iowa currently prohibits a medical cannabidiol manufacturer and a medical cannabidiol dispensary from taking business expense deductions as well because the deductions are not allowed at the federal level. This bill allows a medical cannabidiol manufacturer and a medical cannabidiol dispensary licensed pursuant to Code chapter 124E to deduct business expenses for purposes of the Iowa individual income tax or corporate income tax. The division applies retroactively to tax years beginning on or after January 1, 2022. DIVISION II. The bill exempts from the sales and use tax the sales price of a medical cannabidiol product by a licensed medical cannabidiol manufacturer or a licensed medical cannabidiol dispensary. The sales and use tax exemption takes effect July 1, 2022.