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An Act To Provide Income Tax Relief
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5111, sub-§1-C, as enacted by PL 2011, c. 380, Pt. N, §2 and affected by §19, is amended to read:
 
1-C. Single individuals and married persons filing separate returns; tax year 2013.   For the tax yearsyear beginning on or after January 1, 2013 and before January 1, 2014, for single individuals and married persons filing separate returns:
Sec. 2. 36 MRSA §5111, sub-§2-C, as enacted by PL 2011, c. 380, Pt. N, §4 and affected by §19, is amended to read:
 
2-C. Heads of households; tax year 2013.   For the tax yearsyear beginning on or after January 1, 2013 and before January 1, 2014, for unmarried individuals or legally separated individuals who qualify as heads of households:
Sec. 3. 36 MRSA §5111, sub-§3-C, as enacted by PL 2011, c. 380, Pt. N, §6 and affected by §19, is amended to read:
 
3-C. Individuals filing married joint return or surviving spouses; tax year 2013.   For the tax yearsyear beginning on or after January 1, 2013 and before January 1, 2014, for individuals filing married joint returns or surviving spouses permitted to file a joint return:
Sec. 4.  36 MRSA §5111, sub-§6  is enacted to read:
 
6.  Balancing of tax brackets.     For tax years beginning on or after January 1, 2014, taxes assessed under this section are calculated using income tax bracket thresholds calculated under this subsection.
 
A.  By October 1, 2013 and every 5 years thereafter, the assessor shall calculate income tax bracket thresholds for single persons and married persons filing separately, married persons filing jointly and surviving spouses and heads of household that result in the balancing of individual income taxes so that the following percentages of tax filers for each filing status pay the following top marginal tax rates ranked from lowest taxable income to highest taxable income:
 
B.  For purposes of making the calculation under paragraph A, the following provisions apply.
 
(1) When determining the percentage of filers, the assessor shall use the average number of Maine resident filers for the 5 years prior to the calculation.
 
(2) The percentage of filers must be determined for each filing status of: single persons and married persons filing separately; married persons filing jointly and surviving spouses; and heads of household.
 
(3) The top marginal tax rates are for Maine taxable income.
 
C.  The income tax bracket thresholds calculated under paragraph A apply to tax years beginning on or after the January 1st following the determination of the new bracket thresholds.
 
D.  The assessor shall submit a report to the joint standing committee of the Legislature having jurisdiction over taxation matters by the October 15th of the year of calculation containing the new income tax bracket thresholds, describing the method used to make the calculation and the bracket threshold amounts and estimating the impact of the new rates on individual income tax revenues.
 
SUMMARY
This bill reforms the Maine income tax by establishing a rate structure that includes 6 income tax bracket thresholds with top marginal tax rates from 0% to 10%. The income thresholds for each rate are calculated by the State Tax Assessor every 5 years to maintain the same level of progressivity of the tax by maintaining the same percentage of taxpayers in each top marginal rate category.