Time is of the essence as this bill impacts those Mainers filing their tax returns right now
Augusta –Monday morning, members of the Taxation Committee voted to advance LD 1564 “An Act To Update References to the United States Internal Revenue Code of 1986 Contained in the Maine Revised Statutes” which essentially conforms the Maine tax code to the changes made at the federal level. Several of the tax benefits are aimed at helping Maine’s teachers and college students save money, and also help our state’s small businesses remain competitive. Many of these changes were made permanent by the federal government.
Republicans on the Committee endorsed a plan to match what was done at the federal level through the PATH Act (Protecting Americans From Tax Hikes Act) which made some of the provisions permanent and extended the remaining provisions for either five or two years.
The measure now heads to the Joint Standing Committee on Appropriations and Financial before being sent to the full Senate and House for votes.
“We keep asking ‘what can we do to help small businesses and create jobs?’ Well this is it,” said Rep. Paul Chace (R) of Durham, a member of the Taxation Committee. “Businesses take tax policy seriously. Not fully conforming or conforming for one year is the type of action that sends the wrong message to those looking to relocate businesses here by creating an environment of economic insecurity which scares off new investors. We need to fully conform and we need to do it now. People are filing their returns. Time is not a luxury we have on this issue.”
Members of the Taxation Committee who were present during the public hearing on January 25 heard from Maine’s small business community who spoke overwhelmingly in favor of this legislation that would provide $38 million in tax relief to the Maine people and small businesses around the state.
The changes include deductions and credits for Maine teachers who spend money out of their own pocket on classroom supplies; a tuition deduction for low and middle income earners; tax incentives for Maine small businesses that promote job growth and send a message that business capital is welcome in Maine.
Below are some samples of the testimony from the public hearing on January 25:
Ryan Crane, Crane Brothers Farm – Exeter
“Cash flow budgeting and cash flow management is really important to our farm business. Knowing ahead of time what some of our tax implications will be throughout the year can really help us manage that cash flow and understand where we need to position our business. Other parts of the country have some pretty distinct advantages when it comes to growing crops. … So any type of advantage we can gain in Maine to position ourselves close to on par with our competitors across the country and across the world is important.”
Tim Walton of Cianbro headquartered in Pittsfield, Maine
“With its passage, in addition to ensuring Maine doesn’t fall behind Federal tax policy, we believe this legislation would incentivize existing businesses to make new investments in machinery, equipment and technology and would attract new business and development here in Maine when compared to other locations. This bill is certain to have a significant and positive impact on Maine’s economy and we applaud those promoting its passage.”
David Barber, Former President and CEO of Barber Foods in Portland who employs 300 people in their Maine facility and invest millions into that facility each year to remain competitive.
“As a capital intensive business, we invest millions into the facility in Portland each year to stay ahead of advancing technology so that we are at the cutting edge rather than lagging in this important area… I want to make sure that Maine makes it easy to continue to make these investments, get the maximum benefit possible and keep it simple to evaluate the tax implications by conforming to the Federal regulations.”
Sheena Curtis, Certified Public Accountant with the firm of Berry Dunn in Portland
“While there is a common misconception that these provisions only help the very large businesses, this simply isn’t the case. The costs of equipment and improvements that are often necessities for even my smallest clients can easily exceed the previous limitations set by section 179, and those that would apply for Maine purposes without this bill.”
John Babb, President J&S Oil who have been growing and adding jobs in Maine since 1972
“There is also a hidden cost to all businesses in Maine if Maine does not conform to the federal depreciation provisions. This hidden cost results from having to maintain multiple sets of depreciation records which adds substantial expense and complexity to filing Maine business tax returns.”