IL HB0998

Creates an Illinois state income tax deduction for licensed adult-use cannabis businesses to offset federal tax penalties under Internal Revenue Code Section 280E, which prohibits cannabis businesses from deducting ordinary business expenses on federal returns

Applies to entities licensed under the Cannabis Regulation and Tax Act for the production and distribution of adult-use cannabis products, effective for taxable years beginning on or after January 1, 2024

Requires that the deducted amounts cannot be used as the basis for any other state tax deduction, exemption, or credit

Amends Section 203 of the Illinois Income Tax Act (35 ILCS 5/203) by adding new subtraction modification subparagraphs for individuals, corporations, trusts/estates, and partnerships

Exempts this deduction from the provisions of Section 250 of the Illinois Income Tax Act, which typically sunsets tax preferences