An Act To Lower Maine Income Tax Rates
Sec. 1. 36 MRSA §5111, first ¶, as amended by PL 1999, c. 731, Pt. T, §1, is further amended to read:
A tax is imposed for each taxable year beginning on or after January 1, 2000, on the Maine taxable income of every resident individual of this State. The amount of the tax is determined as provided in this section , except that the rates provided in this section for tax years beginning on or after January 1, 2008 must be adjusted as provided by section 5111-C.
Sec. 2. 36 MRSA §5111, sub-§1-B, as enacted by PL 1999, c. 731, Pt. T, §3, is amended to read:
| If Maine Taxable income is: | The tax is: |
| Less than $4,200 | 2% of the Maine taxable income |
| At least $4,200 but less than $8,350 | $84 plus 4.5% of the excess over $4,200 |
| At least $8,350 but less than $16,700 | $271 plus 7% of the excess over $8,350 |
| $16,700 or more | $856 plus 8.5% of the excess over $16,700 |
Sec. 3. 36 MRSA §5111, sub-§1-C is enacted to read:
| If Maine Taxable income is: | The tax is: |
| Less than $4,750 | 2% of the Maine taxable income |
| At least $4,750 but less than $9,450 | $95 plus 4.5% of the excess over $4,750 |
| At least $9,450 but less than $18,950 | $307 plus 6.5% of the excess over $9,450 |
| $18,950 or more | $924 plus 8% of the excess over $18,950 |
Sec. 4. 36 MRSA §5111, sub-§2-B, as enacted by PL 1999, c. 731, Pt. T, §5, is amended to read:
| If Maine Taxable income is: | The tax is: |
| Less than $6,300 | 2% of the Maine taxable income |
| At least $6,300 but less than $12,500 | $126 plus 4.5% of the excess over $6,300 |
| At least $12,500 but less than $25,050 | $405 plus 7% of the excess over $12,500 |
| $25,050 or more | $1,284 plus 8.5% of the excess over $25,050 |
Sec. 5. 36 MRSA §5111, sub-§2-C is enacted to read:
| If Maine Taxable income is: | The tax is: |
| Less than $7,150 | 2% of the Maine taxable income |
| At least $7,150 but less than $14,200 | $143 plus 4.5% of the excess over $7,150 |
| At least $14,200 but less than $28,450 | $460 plus 6.5% of the excess over $14,200 |
| $28,450 or more | $1,387 plus 8% of the excess over $28,450 |
Sec. 6. 36 MRSA §5111, sub-§3-B, as enacted by PL 1999, c. 731, Pt. T, §7, is amended to read:
| If Maine Taxable income is: | The tax is: |
| Less than $8,400 | 2% of the Maine taxable income |
| At least $8,400 but less than $16,700 | $168 plus 4.5% of the excess over $8,400 |
| At least $16,700 but less than $33,400 | $542 plus 7% of the excess over $16,700 |
| $33,400 or more | $1,711 plus 8.5% of the excess over $33,400 |
Sec. 7. 36 MRSA §5111, sub-§3-C is enacted to read:
| If Maine Taxable income is: | The tax is: |
| Less than $9,500 | 2% of the Maine taxable income |
| At least $9,500 but less than $18,950 | $190 plus 4.5% of the excess over $9,500 |
| At least $18,950 but less than $37,950 | $615 plus 6.5% of the excess over $18,950 |
| $37,950 or more | $1,850 plus 8% of the excess over $37,950 |
Sec. 8. 36 MRSA §5111-C is enacted to read:
§ 5111-C. Reductions in individual income tax rates
Sec. 9. 36 MRSA §5403, as repealed and replaced by PL 1999, c. 731, Pt. T, §10 and affected by §11, is amended to read:
§ 5403. Annual adjustments for inflation
Beginning in 2002 2008, 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 1-C, 2-C and 3-C. If the dollar amounts of each rate bracket, 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 is 1.000 or less, no adjustment may be made for that taxable year in the dollar bracket amounts of the tax rate tables. The assessor shall incorporate such changes into the income tax forms, instructions and withholding tables for the taxable year.
Sec. 10. Application. This Act applies to tax years beginning on or after January 1, 2007.
summary
This bill decreases the top 2 income tax rates over a 4-year period, beginning with tax year 2007. The initial decrease is from 8.5% and 7% to 8% and 6.5%, respectively, and then a further 1% and 0.5% decrease in each rate, respectively, for the 2008, 2009 and 2010 tax years until both rates are 5%.