Maine Tax Alert: Legislature Moves To Slash Pine Tree Zone Benefits And R&D Super Credit

Pierce Atwood LLP
Contact

Portland, ME

The Supplemental Budget just released by the Legislature (LD 1843), if passed as written, may hurt Pine Tree Zone Business as well as businesses that engage in a substantial amount of research and development in Maine. Read LD 1843

The Budget Legislation would cut the Pine Tree Zone Maine income tax credit in half starting with tax years beginning on or after January 1, 2014.  This means that a Pine Tree Zone company that was expecting a 100% Pine Tree Zone income tax credit will now receive a 50% credit.  A Pine Tree Zone company that was expecting a 50% credit will now only receive a 25% credit.  There is no grandfathering of existing Pine Tree Zone businesses in the legislative proposal.    In effect, Pine Tree Zone companies that invested in Maine in reliance on the Pine Tree Zone income tax benefit will not be receiving the benefits that were promised to them by the State if this supplemental budget passes.  This will also hurt the State’s credibility when it tries to attract new businesses to the State.  Other Pine Tree Zone benefits (i.e. the enhanced ETIF benefit and the Pine Tree Zone sales tax exemption) are not affected by these cuts.  We are currently engaged with State officials in an effort to secure an amendment grandfathering existing Pine Tree Zone certified businesses.

The Budget Legislation would also terminate the Maine income tax “super credit” for substantially increased research and development for tax years beginning on or after January 1, 2014. It would also extend from 5 years to 10 years the carryover period for credits carried from prior years and reduces the maximum credit from 50% of the tax otherwise due to 25% of the tax otherwise due.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pierce Atwood LLP | Attorney Advertising

Written by:

Pierce Atwood LLP
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

Pierce Atwood LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide