SB 1095 — Cannabis; deconforms from federal law, medical licensees.

SESSION INTRODUCEDENGROSSED 23101462D I SENATE BILL NO.

1095 OfferedSenate Amendments in [ ] - January 11,26, 2023 N Prefiled January 9, 2023 T A BInternalBILL to amend and reenact § 58.1-301 of the Code of Virginia, relating to conformity with the Internal Revenue Code;

CodePatron ofPrior Virginia, relating to conformityEngrossment––Senator withEbbin theR –––––––––– Patron––Ebbin O –––––––––– D Referred to Committee on Finance and Appropriations E –––––––––– UN Be it enacted by the General Assembly of Virginia:

C 1.

That § 58.1-301 of the Code of Virginia is amended and reenacted as follows:

A.

Any term used in this chapter shall have the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required.

B.

Any reference in this chapter to the laws of the United States relating to federal income taxes shall mean the provisions of the Internal Revenue Code of 1954, and amendments thereto, and other provisions of the laws of the United States relating to federal income taxes, as they existed on December 31, 2021, except for:

TheThat special§ depreciation58.1-301 allowanceof forthe certainCode propertyof providedVirginia foris underamended §§and 168(k),reenacted 168(l),as 1682.follows:

G § 58.1-301.

Conformity to Internal Revenue Code.

R A.

Any term used in this chapter shall have the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly reqB.

Any reference in this chapter to the laws of the United States relating to federal income taxes shall mean the provisions of the Internal Revenue Code of 1954, and amendments thereto, and othSr provisions of the laws of the United States relating to federal income taxes, as they existed on December 31, 2021, except for:

E 1.

The special depreciation allowance for certain property provided for under §§ 168(k), 168Dl), 168(m), 1400L, and 1400N of the Internal Revenue Code;

2.

B 3.

5tax 4.purposes, income from the discharge of indebtedness in connection with the reacquisition of anome "applicable debt instrument" (as defined under § 108(i) of the Internal Revenue Code) reacquireS in the taxable year shall be fully included in the taxpayer's Virginia taxable income for the taxable year, unless the taxpayer elects to include such income in the taxpayer's Virginia taxable income ratably ov0r a three-taxable-year period beginning with taxable year 2009 for transactions completed in taxabl5 year 2009, or over a three-taxable-year period beginning with taxable year 2010 for transactions completed in taxable year 2010 on or before April 21, 2010.

The deferral of certain income under § 108(i) of the Internal Revenue Code.

For Virginia income tax purposes, income from the discharge of indebtedness in connection with the reacquisition of an "applicable debt instrument" (as defined under § 108(i) of the Internal Revenue Code) reacquired in the taxable year shall be fully included in the taxpayer's Virginia taxable income for the taxable year, unless three-taxable-year period beginning with taxable year 2009 for transactions completed in taxable year 2009, or over a three-taxable-year period beginning with taxable year 2010 for transactions completed in taxable year 2010 on or before April 21, 2010.

No other deferral shall be allowed 35 for income from the discharge of indebtedness in connection with the reacquisition of an "applicable 3637 debtdeb5. instrument";

37 5.

taxable39 years6. beginning on and after January 1, 2019, the 7.5 percent of federal adjusted gross income threshold set forth in § 213(a) of the Internal Revenue Code that is used for purposes of computing the deduction allowed for expenses for medical care pursuant to § 213 of the Internal Revenue Code.

For taxable years beginning on and after January 1, 2017, but before January 1, 2018, and for taxable years beginning on and after January 1, 2019, the 7.5 percent of federal adjusted gross income threshold set forth in § 213(a) of the Internal Revenue Code that is used for purposes of computing the deduction allowed for expenses for medical care pursuant to § 213 of the Internal Revenue Code.

7.Security Act, P.L.

The116-136 provisions(2020), ofrelated §§to 2303(a) and 2303(b) of the federalnet Coronavirusoperating Aid,loss Relief,limitation and Economiccarryback;nomic Security8. Act, P.L.

116-136The (2020),provisions relatedof to§ 2304(a) of the netfederal operatingCoronavirus lossAid, limitationRelief, and carryback;Economic Security Act, P.L.

P.L.116-136 (2020), related to a loss limitation applicable to taxpayers other than corporations;

116-136 (2020), related to a loss limitation applicable to taxpayers other than corporations;t, 9.

117-2 (2021) related to deductions, tax attributes,att11. and basis increases for certain loan forgiveness and other business financial assistance;

andFor deductionstaxable foryears ordinarybeginning on and necessaryafter expendituresJanuary made1, in2023, connectionthe withprohibition carrying on autilizing tradetaxnce; or SB1095 2 of 2 business licensed in Virginia pursuant to Subtitle II of Title 4.1 (§ 4.1-600 et.

seq.)and todeductions dealfor ordinary and necessary expenditures made in recreationalconnection with carrying on a trade or medicalSB1095E cannabis2 underof §2 280Ebusiness licensed in Virginia pursuant to Subtitle II of theTitle Internal4.1 Revenue(§ Code.4.1-600 et.

seq.) to deal in [ recreational or ] medical cannabis under § 280E of the Internal Revenue Code.