This bill addresses the situation in which the Legislature has not had the opportunity before the Department of Administrative and Financial Services, Bureau of Revenue Services begins processing Maine income tax returns to conform or adjust Maine laws in response to federal income tax law changes by:
1. Requiring the Commissioner of Administrative and Financial Services to approve an extension of time for payment or filing that would have a material budgetary impact on the State. Prior to approving the extension, the commissioner is required to report in writing to the Governor the nature of the extension and its budgetary impact and to send a copy of the report to the President of the Senate, the Speaker of the House of Representatives, the majority and minority leaders of the Senate and House of Representatives, the chair of the joint standing committee of the Legislature having jurisdiction over taxation matters and the chair of the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs;
2. Requiring the Commissioner of Administrative and Financial Services to report in writing to the Governor a description of the federal changes, their potential effect on Maine income tax laws and the state budget. The commissioner is required to send a copy of the report to the President of the Senate, the Speaker of the House of Representatives, the majority and minority leaders of the Senate and House of Representatives, the chair of the joint standing committee of the Legislature having jurisdiction over taxation matters and
43 the chair of the joint standing committee of the Legislature having jurisdiction over
44 appropriations and financial affairs;
3. After receiving the report, allowing the Governor to direct the State Tax Assessor to temporarily adjust the assessor's administration of the Maine income tax returns based on some or all of such federal income tax law changes; and
4. Requiring the State Tax Assessor, based on direction from the Governor, to provide taxpayers the option of waiting to file their tax returns until the Legislature has enacted legislation to address the federal income tax law changes by filing for an extension or to file their returns consistent with the issued tax returns, forms, instructions and other guidance. If as a result of the changes enacted into law by the Legislature, there is an underpayment by or incorrect refund to a taxpayer, penalties and interest accruing before the date of enactment may not be imposed.