Sec. 1. 36 MRSA §5132 is enacted to read:

§5132.__Rent payment deduction

1.__Deduction.__A person who earns under $25,700 a year and who rents a dwelling for use as that person's place of residence is allowed to deduct from that person's Maine adjusted gross income the lesser of the following:

A.__The amount of rent paid by that person with respect to the dwelling during the taxable year;

B.__Three thousand dollars if that person is filing a single tax return; or

C.__Five thousand dollars if that person is filing a joint tax return or is a single parent with children.

2.__Definition.__For purposes of this section, "dwelling" includes a single-family dwelling or a unit of a multifamily dwelling.

Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 2000.

SUMMARY

This bill creates a rental deduction from state income tax for a person who earns less than $25,700 and who uses the rental dwelling as that person's dwelling. The deduction is the lesser of the rent paid during the taxable year or $5,000 for a person who is filing a joint tax return or is a single parent with children or $3,000 for a person filing a single tax return. The deduction applies to tax years beginning January 1, 2000.