Maine Budget Contains Significant Tax Changes

Averting a potential government shutdown, the Legislature voted to override Governor LePage's veto of the biennial budget. The budget contains many changes to the tax laws, some temporary and some permanent. The most significant aspect of the budget—from a tax perspective—may be what is missing. Many legislators had hoped to repeal the significant tax cuts enacted by the previous Legislature (including the reduction in individual tax rates), but those tax cuts remain in place for the time being. The following is a summary of the key tax aspects of the budget:

Income Tax

• Last session the Capital Investment Credit was enacted to mimic federal bonus depreciation with respect to property placed in service and substantially used in Maine during 2011 and 2012. That credit has been extended for 2013, but will be equal to 9 percent, rather than 10 percent, of the bonus depreciation available for federal income tax purposes.