Maine Governor Proposes Business Tax Breaks

Maine Gov. Paul LePage sent the Legislature a supplemental budget for the biennium ending June 30, 2013, calling for small cuts in business taxes and proposing income tax cuts for military personnel and pensioners.

The spending plan introduced by LePage would: (1) expand the refund of sales tax on purchases of depreciable machinery used for commercial agriculture to include items used in commercial wood harvesting and greenhouse and nursery products; (2) create a new sales and use tax exemption for positive airway pressure equipment used in respiratory ventilation and for related supplies and parts; (3) exempt active duty military pay earned outside of Maine from state income tax, beginning in 2014; and (4) raise the amount of pension and individual retirement account income exempt from taxation from $6,000 to $10,000 in 2014, and by an additional $5,000 each year until it reaches $35,000, with further increases tied to the rate of inflation.

The sales tax exemptions for business would cost the state $705,000 in revenues over the rest of the biennium. The income tax changes would have no impact in the current two-year period.