An Act To Create a Tax Break for Families That Make Less Than $25,000 Annually
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 $10,800 | 2% of the Maine taxable income |
| At least $10,800 but less than $15,500 | $204 plus 4.5% of the excess over $10,800 |
| At least $15,500 but less than $25,000 | $443 plus 7% of the excess over $15,500 |
| $25,000 or more | $1,108 plus 8.5% of the excess over $25,000 |
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 $13,200 | 2% of the Maine taxable income |
| At least $13,200 but less than $20,250 | $264 plus 4.5% of the excess over $13,200 |
| At least $20,250 but less than $34,500 | $581 plus 7% of the excess over $20,250 |
| $34,500 or more | $1,579 plus 8.5% of the excess over $34,500 |
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 $15,500 | 2% of the Maine taxable income |
| At least $15,500 but less than $25,000 | $310 plus 4.5% of the excess over $15,500 |
| At least $25,000 but less than $44,000 | $738 plus 7% of the excess over $25,000 |
| $44,000 or more | $2,068 plus 8.5% of the excess over $44,000 |
Sec. 7. 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. 8. Application. This Act applies to tax years beginning on or after January 1, 2007.
summary
This bill increases the income tax rate schedule bracket amounts, beginning with tax year 2007, by $6,050. The effect of this bill is to increase the amount of taxable income that is taxed at rates below the top rate of 8.5%.