If Maine taxable income is: The tax is:

Less than $10,000 2% of the Maine

taxable income

At least $10,000 but $200 plus 5%

less than $40,000 of the excess

over $10,000

$40,000 or more $1,700 plus 8%

of the excess

over $40,000

Sec. D-7. 36 MRSA §5126, as amended by PL 2001, c. 583, §16, is repealed and the following enacted in its place:

§5126.__Personal exemptions

For tax years beginning on or after January 1, 2003 a resident individual is allowed an amount for each exemption that is equal to the amount allowed for an exemption under the Code.

Sec. D-8. 36 MRSA §5403, as repealed and replaced by PL 1999, c. 731, Pt. T, §10 and affected by §11, is amended to read:

§5403. Annual adjustments for inflation

Beginning in 2002 2003, and each subsequent calendar year thereafter, on or about September 15th, the State Tax Assessor shall multiply the cost-of-living adjustment for taxable years beginning in the succeeding calendar year by the dollar amounts of the tax rate tables specified in section 5111, subsections 1-B, 2-B and 3-B 1-C, 2-C and 3-C. If the dollar amounts of each rate bracket, adjusted by application of the cost-of-living adjustment, are not multiples of $50, any increase must be rounded to the next lowest multiple of $50. If the cost-of-living adjustment for any taxable year is 1.000 or less, no adjustment may be made for that taxable year in the dollar bracket amounts of the tax rate tables. The assessor shall incorporate such changes into the income tax forms, instructions and withholding tables for the taxable year.

Sec. D-9. Application. This Part applies to tax years beginning on or after January 1, 2003.