A New Mexico court has ruled that the state’s licensed medical cannabis producers can claim a tax deduction for prescription medication, which could affect both patients’ costs and the state budget, according to an Albuquerque Journal report.
The recent ruling, handed down by a three-judge panel in a unanimous decision, overturned a hearing officer’s previous decision, according to the news outlet. The 11-page ruling determines that medical cannabis meets the definition of a prescription drug under the state’s tax code since physicians are required to certify that patients have a qualifying condition before they can enroll in the state’s medical cannabis program, the Albuquerque Journal reported.
The court also found that the state’s medical cannabis laws and its allowable tax deduction for prescription drugs are meant to make medication more accessible to patients, according to the news outlet.
New Mexico’s medical cannabis producers paid roughly $24 million in gross tax receipts over the past three years, the Albuquerque Journal reported, and the taxes are generally passed on to patients, who may now see a decrease in the cost of medical cannabis products.
The ruling could leave the New Mexico Taxation and Revenue Department on the hook for millions of dollars; the agency has been denying the state’s medical cannabis producers’ applications for gross receipts tax refunds for years, the Albuquerque Journal reported, and the ruling means that lawmakers will have to allocate enough funding to cover the tax claims this year or next year, if the ruling is not appealed.
A department spokesman told the news outlet Jan. 31 that the agency is reviewing the ruling and considering its legal options. The agency has until Feb. 27 to appeal the ruling, the Albuquerque Journal reported.
