Bill Summary – FastDemocracy

130th MAINE LEGISLATURE
                  FIRST REGULAR SESSION-2021
Legislative Document                                                                       No. 501
H.P. 364                                                House of Representatives, February 19, 2021
           An Act To Amend Maine's Corporate Income Tax by Increasing the
           Top Rate from 8.93 Percent to 12.4 Percent
   Received by the Clerk of the House on February 17, 2021. Referred to the Committee on
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
                                                                               ROBERT B. HUNT
                                                                                          Clerk
Presented by Representative BROOKS of Lewiston.
Cosponsored by Representatives: COLLINGS of Portland, CRAVEN of Lewiston,
GRAMLICH of Old Orchard Beach, TERRY of Gorham, Senator: CHIPMAN of Cumberland.
                                       Printed on recycled paper
 1    Be it enacted by the People of the State of Maine as follows:
 2        Sec. 1. 36 MRSA §5200, sub-§1-A, as enacted by PL 2017, c. 474, Pt. E, §2, is
 3    amended to read:
 4        1-A. Imposition and rate of tax beginning; tax years from 2018 to 2021. For tax
 5    years beginning on or after January 1, 2018 but not later than December 31, 2021, a tax is
 6    imposed for each taxable year at the following rates on each taxable corporation and on
 7    each group of corporations that derives income from a unitary business carried on by 2 or
 8    more members of an affiliated group:
 9    If the income is:                       The tax is:
10    Not over $350,000                       3.5% of the income
11    $350,000 but not over $1,050,000        $12,250 plus 7.93% of the excess over
12                                            $350,000
13    $1,050,000 but not over $3,500,000      $67,760 plus 8.33% of the excess over
14                                            $1,050,000
15    $3,500,000 or more                      $271,845 plus 8.93% of the excess
16                                            over $3,500,000
179   In the case of an affiliated group of corporations engaged in a unitary business with activity
18
10    taxable only by Maine, the rates provided in this subsection are applied only to the first
19
11    $3,500,000 of the Maine net income of the entire group and must be apportioned equally
20
12    among the taxable corporations unless those taxable corporations jointly elect a different
21
13    apportionment. The balance of the Maine net income of the entire group is taxed at 8.93%.
22    In the case of an affiliated group of corporations engaged in a unitary business with activity
23    taxable both within and without this State, the rates provided in this subsection are applied
24    only to the first $3,500,000 of the net income of the entire group and must be apportioned
25    equally among the taxable corporations unless those taxable corporations jointly elect a
26    different apportionment. The balance of the net income of the entire group is taxed at
27    8.93%.
28        Sec. 2. 36 MRSA §5200, sub-§1-B is enacted to read:
29        1-B. Imposition and rate of tax beginning 2022. For tax years beginning on or after
30    January 1, 2022, a tax is imposed for each taxable year at the following rates on each taxable
31    corporation and on each group of corporations that derives income from a unitary business
32    carried on by 2 or more members of an affiliated group:
33    If the income is:                       The tax is:
34    Not over $350,000                       3.5% of the income
35    $350,000 but not over $1,050,000        $12,250 plus 7.93% of the excess over
36                                            $350,000
37    $1,050,000 but not over $3,500,000      $67,760 plus 8.33% of the excess over
38                                            $1,050,000
39    $3,500,000 or more                      $271,845 plus 12.4% of the excess
40                                            over $3,500,000
41
33    In the case of an affiliated group of corporations engaged in a unitary business with activity
42
34    taxable only by Maine, the rates provided in this subsection are applied only to the first
43
35    $3,500,000 of the Maine net income of the entire group and must be apportioned equally
                                          Page 1 - 130LR1123(01)
36
 1   among the taxable corporations unless those taxable corporations jointly elect a different
37
 2   apportionment. The balance of the Maine net income of the entire group is taxed at 12.4%.
 3   In the case of an affiliated group of corporations engaged in a unitary business with activity
 4   taxable both within and without this State, the rates provided in this subsection are applied
 5   only to the first $3,500,000 of the net income of the entire group and must be apportioned
 6   equally among the taxable corporations unless those taxable corporations jointly elect a
 7   different apportionment. The balance of the net income of the entire group is taxed at
 8   12.4%.
 9                                          SUMMARY
10       This bill increases the income tax rate on corporations in the top income tax bracket
11   from 8.93% to 12.4% for tax years beginning on or after January 1, 2022.
                                         Page 2 - 130LR1123(01)
Statutes affected: 
Bill Text LD 501, HP 364: 36.5200