An Act To Reduce Maine's Income Tax Rates by 50 Percent
Sec. 1. 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. 2. 36 MRSA §5111, sub-§1-C is enacted to read:
| If Maine Taxable income is: | The tax is: |
| Less than $4,200 | 1% of the Maine taxable income |
| At least $4,200 but less than $8,350 | $42 plus 2.25% of the excess over $4,200 |
| At least $8,350 but less than $16,700 | $135 plus 3.5% of the excess over $8,350 |
| $16,700 or more | $428 plus 4.25% of the excess over $16,700 |
Sec. 3. 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. 4. 36 MRSA §5111 sub-§2-C is enacted to read:
| If Maine Taxable income is: | The tax is: |
| Less than $6,300 | 1% of the Maine taxable income |
| At least $6,300 but less than $12,500 | $63 plus 2.25% of the excess over $6,300 |
| At least $12,500 but less than $25,050 | $203 plus 3.5% of the excess over $12,500 |
| $25,050 or more | $642 plus 4.25% of the excess over $25,050 |
Sec. 5. 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. 6. 36 MRSA §5111, sub-§3-C is enacted to read:
| If Maine Taxable income is: | The tax is: |
| Less than $8,400 | 1% of the Maine taxable income |
| At least $8,400 but less than $16,700 | $84 plus 2.25% of the excess over $8,400 |
| At least $16,700 but less than $33,400 | $271 plus 3.5% of the excess over $16,700 |
| $33,400 or more | $855 plus 4.25% of the excess over $33,400 |
Sec. 7. 36 MRSA §5200, sub-§1, as amended by PL 2005, c. 618, §6 and as affected by §22, is further amended to read:
| If the income is: | The tax is: |
| Not over $25,000 | 3.5% of the income |
| $25,000 but not over $75,000 | $875 plus 7.93% of the excess over $25,000 |
| $75,000 but not over $250,000 | $4,840 plus 8.33% of the excess over $75,000 |
| $250,000 or more | $19,418 plus 8.93% of the excess over $250,000 |
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable only by Maine, the rates provided in this subsection are applied only to the first $250,000 of the Maine net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the Maine net income of the entire group is taxed at 8.93%.
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable both within and without this State, the rates provided in this subsection are applied only to the first $250,000 of the net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the net income of the entire group is taxed at 8.93%.
Sec. 8. 36 MRSA §5200-B is enacted to read:
§ 5200-B. Imposition and rate of tax.
| If the income is: | The tax is: |
| Not over $25,000 | 1.75% of the income |
| $25,000 but not over $75,000 | $438 plus 3.965% of the excess over $25,000 |
| $75,000 but not over $250,000 | $2,420 plus 4.165% of the excess over $75,000 |
| $250,000 or more | $9,709 plus 4.465% of the excess over $250,000 |
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable only by Maine, the rates provided in this subsection are applied only to the first $250,000 of the Maine net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the Maine net income of the entire group is taxed at 4.465%.
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable both within and without this State, the rates provided in this subsection are applied only to the first $250,000 of the net income of the entire group and must be apportioned equally among the taxable corporations unless those corporations jointly elect a different apportionment. The balance of the net income of the entire group is taxed at 4.465%.
summary
This bill reduces the individual and corporate income tax rates by 50% beginning in the 2007 tax year.