Public Laws

124th Legislature

First Regular Session


Parts: A B C D

Chapter 382

H.P. 1051 - L.D. 1495

PART A

Sec. A-1. 36 MRSA §5111,  as amended by PL 1999, c. 731, Pt. T, §§1 to 7, is repealed and the following enacted in its place:

§ 5111.   Imposition and rate of tax

A tax is imposed for each taxable year beginning on or after January 1, 2010 on the Maine taxable income of every resident individual of this State at the rate of 6.5%.

Sec. A-2. 36 MRSA §5111-A,  as repealed and replaced by PL 1987, c. 819, §3, is repealed.

Sec. A-3. 36 MRSA §5111-C  is enacted to read:

§ 5111-C.   Income tax surcharge

For tax years beginning on or after January 1, 2010, in addition to the tax imposed pursuant to section 5111 for the taxable year, there is imposed a tax surcharge on the amount of state tax liability due for any tax year that begins on or after January 1, 2010. The tax surcharge is .35% of the Maine taxable income that exceeds $250,000. The Maine taxable income threshold amount of $250,000 must be indexed in accordance with chapter 841 and if the amount so indexed is not a multiple of $50 the indexed amount must be rounded to the next lowest multiple of $50.

Sec. A-4. 36 MRSA §5112,  as enacted by P&SL 1969, c. 154, Pt. F, §1, is repealed.

Sec. A-5. 36 MRSA §5113,  as repealed and replaced by PL 1983, c. 571, §19, is repealed.

Sec. A-6. 36 MRSA §5121,  as amended by PL 2003, c. 390, §26, is further amended to read:

§ 5121.  Maine taxable income

The Maine taxable income of a resident individual is equal to the individual's federal adjusted gross income as defined by the Code with the modifications and less the deductions and personal exemptions provided in this chapter.

Sec. A-7. 36 MRSA §5122, sub-§2, ¶L,  as amended by PL 2003, c. 705, §11 and affected by §14, is further amended to read:

L. For income tax years beginning on or after January 1, 2000 and before January 1, 2004, an amount equal to the total premiums spent for qualified long-term care insurance contracts as defined in the Code, Section 7702B(b), as long as the amount subtracted is reduced by the long-term care premiums claimed as an itemized deduction pursuant to section 5125. For income tax years beginning on or after January 1, 2004 and before January 1, 2010, an amount equal to the total premiums spent for qualified long-term care insurance contracts as defined in the Code, Section 7702B(b), as long as the amount subtracted is reduced by any amount claimed as a deduction for federal income tax purposes in accordance with the Code, Section 162(l) and by the long-term care premiums claimed as an itemized deduction pursuant to section 5125 . For income tax years beginning on or after January 1, 2010, an amount equal to the total premiums spent for qualified long-term care insurance contracts as defined in the Code, Section 7702B(b), as long as the amount subtracted is reduced by any amount claimed as a deduction for federal income tax purposes in accordance with the Code, Section 162(l);

Sec. A-8. 36 MRSA §5122, sub-§2, ¶T,  as amended by PL 2005, c. 519, Pt. LLL, §1 and c. 622, §26, is further amended to read:

T. For income tax years beginning on or after January 1, 2002 and before January 1, 2004, an amount equal to the total premiums spent for long-term care insurance policies certified under Title 24-A, section 5075-A as long as the amount subtracted is reduced by the long-term care premiums claimed as an itemized deduction pursuant to section 5125.

For income tax years beginning on or after January 1, 2004 but before January 1, 2010, an amount equal to the total premiums spent for qualified long-term care insurance contracts certified under Title 24-A, section 5075-A, as long as the amount subtracted is reduced by any amount claimed as a deduction for federal income tax purposes in accordance with the Code, Section 162(l) and by the long-term care premiums claimed as an itemized deduction pursuant to section 5125 . For income tax years beginning on or after January 1, 2010, an amount equal to the total premiums spent for qualified long-term care insurance contracts certified under Title 24-A, section 5075-A, as long as the amount subtracted is reduced by any amount claimed as a deduction for federal income tax purposes in accordance with the Code, Section 162(l);

Sec. A-9. 36 MRSA §5124-A,  as amended by PL 2009, c. 213, Pt. BBBB, §9 and affected by §17, is repealed.

Sec. A-10. 36 MRSA §5125,  as amended by PL 2007, c. 539, Pt. CCC, §§9 to 11, is repealed.

Sec. A-11. 36 MRSA §5126,  as amended by PL 2001, c. 583, §16, is repealed.

Sec. A-12. 36 MRSA §5160,  as amended by PL 2003, c. 390, §35, is further amended to read:

§ 5160.  Imposition of tax

The tax is imposed, at the rates rate provided by section 5111 for single individuals, upon the Maine taxable income of estates and trusts. The tax must be paid by the fiduciary.

Sec. A-13. 36 MRSA §5192, sub-§2,  as amended by PL 1985, c. 783, §32, is repealed.

Sec. A-14. 36 MRSA §5203-B,  as amended by PL 2003, c. 673, Pt. JJ, §2 and affected by §6, is repealed.

Sec. A-15. 36 MRSA §5203-C,  as amended by PL 2005, c. 618, §§7 and 8 and affected by §22, is further amended to read:

§ 5203-C.  State minimum tax

1. Definitions.   As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A.  "Adjusted alternative minimum tax ," for individuals, estates and trusts, means the excess, if any, of the alternative minimum tax over the amount that would have been the alternative minimum tax had only the adjustments and items of preference specified in the Code, Section 53(d)(1)(B)(ii) been taken into account in determining alternative minimum tax. For corporations subject to the tax imposed by this section, "adjusted alternative minimum tax" means alternative minimum tax.
B. "Alternative minimum tax" means any excess of tentative minimum tax over the regular income tax.
C "Alternative minimum taxable income" means tentative alternative minimum taxable income less the applicable exemption amount, except that:

(1) For taxable corporations with income from business activity that is taxable both within and without this State, "alternative minimum taxable income" means tentative alternative minimum taxable income less the applicable exemption amount, the result of which is multiplied by the fraction described in section 5211, subsection 8; or

(2) For nonresident estates and trusts with income derived from Maine sources, "alternative minimum taxable income" means tentative alternative minimum taxable income less the applicable exemption amount, the result of which is multiplied by a fraction, the numerator of which is the taxpayer's tentative alternative minimum taxable income from Maine sources and the denominator of which is the taxpayer's total tentative alternative minimum taxable income from all sources.

C-1 "Alternative minimum taxable income" for taxable corporations with income from business activity that is taxable both within and without this State means tentative alternative minimum taxable income less the applicable exemption amount, the result of which is multiplied by the fraction described in section 5211, subsection 8.
D. "Exemption amount" means the applicable exemption as provided by the Code, Section 55(d) as of December 31, 2002, except that tentative alternative minimum taxable income as determined under paragraph G must be substituted in the computation of the phase-out under the Code, Section 55(d)(3).
E. "Federal alternative minimum taxable income" means alternative minimum taxable income determined in accordance with the Code, Sections Section 55(b)(2) and 59(c).
F "Regular income tax" means:

(1) For resident individuals, estates and trusts, the amount derived by multiplying the applicable tax rate or rates by taxable income under section 5121 or 5163;

(2) For nonresident individuals, estates and trusts, the amount derived by multiplying the applicable tax rate or rates by taxable income under section 5121 or 5175, the result of which is adjusted for nonresident individuals in accordance with section 5111, subsection 4; or

(3) For taxable corporations, the amount derived by multiplying the applicable tax rate or rates against Maine net income under section 5102, subsection 8.

F-1 "Regular income tax" means the amount derived by multiplying the applicable tax rate or rates against Maine net income under section 5102, subsection 8.
G. "Tentative alternative minimum taxable income" means federal alternative minimum taxable income:

(1) Reduced by income that states are prohibited under federal law from subjecting to income tax to the extent included in federal alternative minimum taxable income;

(2) Reduced by income, loss or deductions by which the State decreases federal adjusted gross income in the case of individuals or federal taxable income in the case of corporations, estates and trusts under section 5122, section 5125, subsection 3 or section 5164, 5176 or 5200-A or as otherwise indicated by law to the extent included in federal alternative minimum taxable income; and

(3) Increased by income, loss or deductions by which the State increases federal adjusted gross income in the case of individuals or federal taxable income in the case of corporations, estates and trusts under section 5122, section 5125, subsection 3 or section 5164, 5176 or 5200-A or as otherwise indicated by law to the extent not included in federal alternative minimum taxable income.

H "Tentative minimum tax" means:

(1) Except as provided in subparagraph (2), in the case of a taxpayer other than a taxable corporation, the sum of:

(a) An amount equal to 7% of so much of the alternative minimum taxable income as does not exceed $175,000; plus

(b) An amount equal to 7.6% percent of so much of the alternative minimum taxable income as exceeds $175,000.

For a nonresident individual, the tentative minimum tax must be adjusted in accordance with section 5111, subsection 4.

(2) In the case of a married individual filing a separate return, the sum of:

(a) An amount equal to 7% of so much of the alternative minimum taxable income as does not exceed $87,500; plus

(b) An amount equal to 7.6% percent of so much of the alternative minimum taxable income as exceeds $87,500.

For a nonresident individual, the tentative minimum tax must be adjusted in accordance with section 5111, subsection 4.

(3) In the case of a taxable corporation, the tentative minimum tax for the taxable year is 5.4% of the alternative minimum taxable income.

H-1 "Tentative minimum tax" for the taxable year is 5.4% of the alternative minimum taxable income.
2 Tax imposed.   In addition to all other taxes contained in this Part, a tax in an amount equal to the alternative minimum tax is imposed for each taxable year on the following taxpayers:
A Resident individuals, trusts and estates;
B Nonresident individuals, trusts and estates with Maine-source income; and
C Taxable corporations required to file an income tax return under this Part, excluding financial institutions subject to the tax imposed by chapter 819 and persons not subject to the federal alternative minimum tax under the Code, Section 55(e).
2-A Tax imposed.   In addition to all other taxes contained in this Part, a tax in an amount equal to the alternative minimum tax is imposed for each taxable year on taxable corporations required to file an income tax return under this Part, excluding financial institutions subject to the tax imposed by chapter 819 and persons not subject to the federal alternative minimum tax under the Code, Section 55(e).
3 Credit for tax paid to other taxing jurisdiction.   A resident individual, estate or trust is allowed a credit against the tax otherwise due under this section for the amount of alternative minimum tax imposed on that individual, estate or trust for the taxable year by another state of the United States, a political subdivision of any such state, the District of Columbia or any political subdivision of a foreign country that is analogous to a state of the United States with respect to income derived from sources in that taxing jurisdiction also subject to tax under this section. The credit for any of the specified taxing jurisdictions may not exceed the proportion of the tax otherwise due under this section that the amount of the taxpayer's tentative alternative minimum taxable income derived from sources in that taxing jurisdiction bears to the taxpayer's entire tentative alternative minimum taxable income. When a credit is claimed for alternative minimum taxes paid to both a state and a political subdivision of that state, the total credit allowable for those taxes in the aggregate may not exceed the proportion of the tax otherwise due under this section that the amount of the taxpayer's tentative alternative minimum taxable income derived from sources in the other state bears to the taxpayer's entire tentative alternative minimum taxable income.
4. Minimum tax credit.   A minimum tax credit is allowed as follows.
A.  A taxable corporation is allowed a minimum tax credit is allowed against the liability arising under this Part for any taxable year other than withholding tax liability. The minimum tax credit equals the excess, if any, of the adjusted alternative minimum tax, reduced by the credit for tax paid to other jurisdictions determined under subsection 3 and the Pine Tree Development Zone tax credit provided by section 5219-W, that was imposed for all prior taxable years beginning after 2003 over the amount allowable as a credit under this subsection for such prior taxable years, plus unused minimum tax credits from years beginning after 1990.
B. The credit allowable for a taxable year under this subsection is limited to the amount, if any, by which the regular income tax after application of all other credits arising under this Part exceeds the tentative minimum tax.

Sec. A-16. 36 MRSA §5204,  as amended by PL 1987, c. 772, §38, is repealed.

Sec. A-17. 36 MRSA §5204-A,  as amended by PL 1993, c. 395, §20, is repealed.

Sec. A-18. 36 MRSA §5216-C, sub-§1,  as enacted by PL 1999, c. 475, §6 and affected by §7, is amended to read:

1. Credit allowed.   A taxpayer who contributes to a family development account reserve fund as defined in Title 10, section 1075 is allowed a credit against the tax imposed by this Part equal to the lower of:
A. Twenty-five thousand dollars; or and
B. Fifty percent of the amount contributed by the taxpayer.

Only one credit may be claimed on each annual income tax return regardless of filing status. The credit allowed under this section may not reduce the tax to less than 0 and must be applied after allowance for all other eligible credits. A taxpayer who claims a credit under this section may not claim an itemized charitable deduction under section 5125 for the amount of the contribution that qualified for the credit.

Sec. A-19. 36 MRSA §5217-A,  as amended by PL 2003, c. 673, Pt. JJ, §4 and affected by §6, is further amended to read:

§ 5217-A.  Income tax paid to other taxing jurisdiction

A resident individual is allowed a credit against the tax otherwise due under this Part , excluding the tax imposed by section 5203-C, for the amount of income tax imposed on that individual for the taxable year by another state of the United States, a political subdivision of any such state, the District of Columbia or any political subdivision of a foreign country that is analogous to a state of the United States with respect to income subject to tax under this Part that is derived from sources in that taxing jurisdiction. In determining whether income is derived from sources in another jurisdiction, the assessor may not employ the law of the other jurisdiction but shall instead assume that a statute equivalent to section 5142 applies in that jurisdiction. The credit, for any of the specified taxing jurisdictions, may not exceed the proportion of the tax otherwise due under this Part , excluding the tax imposed by section 5203-C, that the amount of the taxpayer's Maine adjusted gross income derived from sources in that taxing jurisdiction bears to the taxpayer's entire Maine adjusted gross income; except that, when a credit is claimed for taxes paid to both a state and a political subdivision of a state, the total credit allowable for those taxes does not exceed the proportion of the tax otherwise due under this Part , excluding the tax imposed by section 5203-C, that the amount of the taxpayer's Maine adjusted gross income derived from sources in the other state bears to the taxpayer's entire Maine adjusted gross income.

Sec. A-20. 36 MRSA §5218-A  is enacted to read:

§ 5218-A.   Household credit

1 Credit allowed.   A resident individual is allowed a credit, referred to in this section as "the household credit," against the tax imposed by this Part. Unless the taxpayer elects to calculate the household credit under section 5218-B, the household credit is equal to the amount calculated in this section. An individual filing a return under section 5224-A is not eligible for a credit under this section.
2 Amount of base credit.   The base household credit is:
A For single individuals, $700;
B For unmarried individuals or legally separated individuals who qualify as heads of households, $1,050;
C For individuals filing married joint returns or surviving spouses permitted to file a joint return, $1,200; and
D For married persons filing separate returns, $600.
3 Additional credit.   The base household credit is increased by $250 for each person for whom the individual is entitled to claim an exemption under the Code.
4 Phaseout of credit.   The household credit calculated under subsections 2 and 3 is reduced by $1.50 for every $100 that the individual's taxable income exceeds:
A For single individuals and married persons filing separate returns, $27,500;
B For unmarried individuals or legally separated individuals who qualify as heads of households, $41,250; and
C For individuals filing married joint returns or surviving spouses permitted to file a joint return, $55,000.
5 Credit refundable.   The household credit allowed under this section is refundable up to $70 for a married joint return and $50 for all other returns filed by an individual who is not claimed as a dependent by another individual on a return under the Code.
6 Adjustment for inflation.   For tax years beginning in 2014 and thereafter, the household credit amounts under subsections 2 and 3 and the credit phaseout thresholds under subsection 4 must be adjusted annually for inflation as provided in chapter 841.

Sec. A-21. 36 MRSA §5218-B  is enacted to read:

§ 5218-B.   Alternate calculation of household credit

1 General.   A resident individual who has claimed itemized deductions from federal adjusted gross income in determining the individual's federal taxable income for the taxable year may elect to calculate the household credit as provided in this section instead of under section 5218-A. An individual filing a return under section 5224-A is not eligible for a credit under this section. The credit calculated under this section is referred to in this section as "the alternate household credit."
2 Base.   The alternate household credit is calculated by modifying the individual's total federal itemized deductions by:
A Reducing the total by any amount attributable to income taxes or sales and use taxes imposed by this State or any other taxing jurisdiction;
B Increasing the total by any amount of interest or expense incurred in the production of income taxable under this Part but exempt from federal income tax that was not deducted in determining the individual's federal taxable income;
C Reducing the total by any amount of deduction attributable to income taxable to financial institutions under chapter 819;
D Reducing the total by any amount attributable to interest or expenses incurred in the production of income exempt from tax under this Part; and
E Reducing the total by any amount attributable to a contribution that qualified for and was actually used as a credit under section 5216-C.
3 Amount of base alternate household credit.   The base alternate household credit is 5.5% of the individual's federal itemized deductions modified under subsection 2 plus:
A For single individuals and married persons filing separate returns, $400;
B For unmarried individuals or legally separated individuals who qualify as heads of households, $600; and
C For individuals filing married joint returns or surviving spouses permitted to file a joint return, $800.
4 Additional credit.   The base alternate household credit, as adjusted under subsection 5, is increased by $250 for each person for whom the individual is entitled to claim an exemption under the Code.
5 Maximum base alternate household credit.   An individual's base alternate household credit may not exceed:
A For individuals filing as single or for married individuals filing separately, $1,150;
B For individuals filing as heads of households, $1,750; or
C For married individuals filing jointly, $2,300.
6 Phaseout; refundability.   An alternate household credit calculated under this section is subject to the phaseout and refundability provisions of section 5218-A, subsections 4 to 6. The maximum alternate household credit amounts under subsection 5 must be adjusted annually for inflation as provided in chapter 841.

Sec. A-22. 36 MRSA §5218-C  is enacted to read:

§ 5218-C.   Credit for certain charitable contributions

A credit is allowed against the tax otherwise due under this Part for certain charitable contributions. The credit equals 5% of the amount of charitable contributions claimed on a federal return, excluding deductions carried over from prior years, that exceeds $250,000.

Sec. A-23. 36 MRSA §5218-D  is enacted to read:

§ 5218-D.   Elderly credit

A credit is allowed in the amount of $60 for each taxpayer who is 65 years of age or older or $120 for a married joint return if both spouses are 65 years of age or older. The credit is reduced by $2 for every $100 of adjusted gross income over $32,000 for single filers, $52,000 on a married joint return, $48,000 on a head of household return and $26,000 on a married filing separately return.

Sec. A-24. 36 MRSA §5219-A,  as amended by PL 2003, c. 390, §§46 and 47, is repealed.

Sec. A-25. 36 MRSA §5219-H, sub-§2,  as repealed and replaced by PL 2003, c. 673, Pt. F, §1 and affected by §2, is amended to read:

2. Meaning of tax liability.   Whenever a credit provided for in chapter 822 is limited by reference to tax liability, "tax liability" means the tax liability for all taxes under this Part, except the minimum tax imposed by section 5203-C and the taxes imposed by chapter 827.

Sec. A-26. 36 MRSA §5219-N,  as amended by PL 2003, c. 673, Pt. JJ, §5 and affected by §6, is repealed.

Sec. A-27. 36 MRSA §5219-S, sub-§4,  as enacted by PL 2007, c. 693, §31, is repealed and the following enacted in its place:

4 Limitation.   For tax years beginning before January 1, 2010, the credit allowed by this section may not reduce the Maine income tax to less than zero. For tax years beginning on or after January 1, 2010, the credit allowed by this section is refundable after application of all other credits under this chapter excluding the refundable portion of the income tax credit for child care expenses under section 5218, subsection 4, up to a maximum refundable amount under this section of $150 for individuals filing married joint returns and $125 for all other taxpayers reduced by the refundable household credit amount determined under section 5218-A or section 5218-B. The refundable portion of the credit under this subsection is limited to the applicable ratio as determined for nonresidents and part-year residents under subsections 2 and 3.

Sec. A-28. 36 MRSA §5224-A,  as amended by PL 1989, c. 596, Pt. J, §5, is further amended to read:

§ 5224-A.  Tax return of part-year resident

If an individual changes that individual's status as a resident individual or nonresident individual during the taxable year, the individual shall file a nonresident return pursuant to section 5220, subsection 2. That individual's tax shall must be computed, pursuant to section 5111 , subsection 4, as if that individual were a nonresident individual, except that the numerator of the apportionment ratio shall be is comprised of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph A, for the portion of the taxable year during which that individual was a resident, plus that individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B, for the portion of the taxable year during which that individual was a nonresident. The part-year resident shall is also be entitled to the credit provided by section 5217-A, computed as if the individual's Maine adjusted gross income for the entire year were comprised only of that portion which that is attributed to the portion of the year during which that individual was a resident.

Sec. A-29. 36 MRSA §5250, sub-§2,  as amended by PL 1997, c. 668, §§36 and 37, is repealed.

Sec. A-30. 36 MRSA §5250, sub-§5  is enacted to read:

5 Adjustment for household credit.   The withholding amounts determined by the assessor under subsection 1 must take into account the effect of the household credit under section 5218-A.

Sec. A-31. 36 MRSA §5275, sub-§1,  as enacted by P&SL 1969, c. 154, §F, is amended to read:

1. An amount less than wages.   As the amount of the wages shown on his the individual's return for any taxable year an amount less than such wages actually shown, or the individual must pay a fine of $50 for the statement, unless:
A Such statement did not result in a decrease in the amounts deducted and withheld; or
B The taxes imposed with respect to the individual under this Part for the succeeding taxable year do not exceed the sum of the payments of estimated tax that are considered payments on account of such taxes.

Sec. A-32. 36 MRSA §5275, sub-§2,  as amended by PL 1979, c. 378, §44, is repealed.

Sec. A-33. 36 MRSA §5401,  as enacted by IB 1983, c. 2, §4, is amended to read:

§ 5401.  Findings and purpose

Inflation erodes the value of personal exemptions and deductions provisions in the Maine individual income tax structure intended to moderate the impact of state and local taxes and distorts fiscal equity among taxpayers. Inflation-induced increases in individual income tax revenues result in annual collections that exceed the amounts anticipated by legislative actions establishing rates, exemptions, deductions and other features of the Maine individual income tax. Furthermore, the income tax laws of this State, in combination with economic inflation, have caused inequitable treatment of the taxpayers because the application of inflexible, statutorily prescribed rates of tax, standard deduction and personal exemption to increasing personal incomes has resulted in increasing the taxpayer's tax liability while the taxpayers taxpayer's purchasing power has remained the same or, in some instances , has decreased. It is the purpose of this Act to correct this situation by requiring that certain components of the individual income tax structure be adjusted in order to compensate for the impact of inflation.

Sec. A-34. 36 MRSA §5402, sub-§1-B,  as enacted by PL 1999, c. 731, Pt. T, §8 and affected by §11, is amended to read:

1-B. Cost-of-living adjustment.   The "cost-of-living adjustment" for any calendar year is the Consumer Price Index for the 12-month period ending June 30th of the preceding calendar year divided by the Consumer Price Index for the 12-month period ending June 30, 2001 2012.

Sec. A-35. 36 MRSA §5403,  as amended by PL 2009, c. 213, Pt. WWW, §1 and affected by §2, is further amended to read:

§ 5403.  Annual adjustments for inflation

Beginning in 2002 2013, 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 base household credit amounts under section 5218-A, subsection 2, the additional credit amount under section 5218-A, subsection 3, the credit phaseout thresholds under section 5218-A, subsection 4, the refundable limits under section 5218-A, subsection 5, the base alternate household credit amounts under section 5218-B, subsection 3, the additional credit amount under section 5218-B, subsection 4 and the maximum base alternate household credit amounts under section 5218-B, subsection 5. If the dollar amounts of each rate bracket for each base household credit amount under section 5218-A, subsection 2, each base alternate household credit amount under section 5218-B, subsection 3 or each maximum base alternate household credit amount under section 5218-B, subsection 5, adjusted by application of the cost-of-living adjustment, are not multiples of $50 $25, any increase must be rounded to the next lowest multiple of $50 $25. If the dollar amounts for the additional credit under section 5218-A, subsection 3, the refundable limits under section 5218-A, subsection 5 or the additional credit under section 5218-B, subsection 4, adjusted by application of the cost-of-living adjustment, are not multiples of $5, any increase must be rounded to the next lowest multiple of $5. If the dollar amounts for the credit phaseout thresholds under section 5218-A, subsection 4, 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 would be less than the cost-of-living adjustment for the preceding calendar year, the cost-of-living adjustment is the same as for the preceding calendar year. The assessor shall incorporate such changes into the income tax forms, instructions and withholding tables for the taxable year.

Beginning in 2009 and each subsequent calendar year thereafter, the assessor shall reduce the cost-of-living adjustment by an amount that increases estimated noncorporate income tax revenue by $10,500,000 for that calendar year using as a benchmark the most recent revenue projections of the Revenue Forecasting Committee established in Title 5, section 1710-E.

Sec. A-36. Legislative intent. It is the intent of the Legislature that the household credit provided under the Maine Revised Statutes, Title 36, section 5218-A and section 5218-B is to provide relief to low-income and middle-income persons from the disproportionate cost of living in this State including the high cost of heating oil and the heavy reliance of the citizens of the State on heating oil, which is the highest in the nation; the high cost of transportation and the limited availability of public transportation; the disproportionate state and local tax burden, including the extension of sales tax to services; and the high rate of local property taxes that contribute to household costs.

Sec. A-37. Report; authority for legislation. As soon as possible but no later than November 1, 2011, the State Tax Assessor shall submit a report to the joint standing committee of the Legislature having jurisdiction over taxation matters that includes 2010 tax data and revenue projections and shows the actual impact of this Act in 2010 and the projected impact of this Act in 2011 and 2012 on revenues and tax progressivity resulting from the changes in the tax laws effected by this Act.

The committee may submit legislation to the Second Regular Session of the 125th Legislature to adjust the household credit and alternative household credit to maintain revenue neutrality and to ensure that any revenue that exceeds revenue neutrality is used to increase the household and alternative household credits. The legislation may also include changes to the Maine Residents Property Tax Program as a means of providing tax relief.

Sec. A-38. Effective date; application. This Part takes effect January 1, 2010 and applies to income tax years beginning on or after January 1, 2010.

Office of the Revisor of Statutes
State House, Room 108
Augusta, ME 04333