An Act To Strengthen Maine's Craft Brewers
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 28-A MRSA §1653 is enacted to read:
A brewer is eligible for a credit against the excise tax imposed pursuant to this chapter as provided in this section.
1. Eligibility. A brewer is eligible for a credit under this section if the brewer: A. Is licensed to and does manufacture malt liquor in this State;
B. Exports malt liquor for sale outside this State; and
C. Pays excise taxes imposed pursuant to section 1652.
2. Amount of credit; schedule. A brewer eligible under subsection 1 is entitled to a credit in the amount of 17.5¢ per gallon of malt liquor manufactured in this State and exported for sale outside this State, calculated annually for each year the credit is claimed according to the procedure in subsection 3: A. For the fiscal year 2007-08, on 90% of the total amount manufactured and exported in that year;
B. For the fiscal year 2008-09, on 80% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
C. For the fiscal year 2009-10, on 70% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
D. For the fiscal year 2010-11, on 60% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
E. For the fiscal year 2011-12, on 50% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
F. For the fiscal year 2012-13, on 40% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
G. For the fiscal year 2013-14, on 30% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
H. For the fiscal year 2014-15, on 20% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation;
I. For the fiscal year 2015-16, on 10% of the total amount manufactured and exported in that year, plus an additional credit of 17.5¢ per gallon on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation; and
J. For the fiscal year 2016-17, on the amount in excess of 110% of the amount manufactured and exported in the previous year of participation.
The credit available to a brewer under this subsection may not exceed 50% of the amount of excise taxes otherwise due from the brewer under section 1652.
3. Procedure for claiming credit. The credit calculated under subsection 2 on the initial threshold percentage of sales for the applicable year may be claimed on the brewer’s monthly return under section 1652, subsection 2-A. The credit on amounts in excess of 110% of the amount manufactured and exported in the applicable year may be claimed on the return filed under section 1652, subsection 2-A for the last month of the applicable year.
4. Rules; forms. The bureau shall adopt rules necessary for the implementation of this section, including forms to be made available to brewers. Rules adopted pursuant to this subsection are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
5. Repeal. This section is repealed March 1, 2011 unless the Commissioner of Economic and Community Development certifies to the Legislature under Title 36, section 6762 that the total number of new qualified employees of qualified brewers statewide for which reimbursement was made under Title 36, chapter 917 for calendar year 2010 exceeds the number of full-time equivalent employees of qualified brewers statewide for calendar year 2007 by 10%.
Sec. 2. 36 MRSA §6753, sub-§3, as enacted by PL 1995, c. 669, §5, is amended to read:
3. Applicant. "Applicant" means a qualified business or a qualified brewer that has submitted an application to the commissioner for approval of an employment tax increment financing development program.
Sec. 3. 36 MRSA §6753, sub-§7, as amended by PL 2005, c. 351, §22 and affected by §26, is further amended to read:
7. Employment tax increment. "Employment tax increment" means that level of employment, payroll and state income withholding taxes attributed to qualified employees employed by a qualified business or qualified brewer above the base level for the qualified business or qualified brewer, adjusted pursuant to subsection 12 for shifts in employment by affiliated businesses.
Sec. 4. 36 MRSA §6753, sub-§9, as enacted by PL 1995, c. 669, §5, is amended to read:
9. Gross employment tax increment. "Gross employment tax increment" means that level of employment, payroll and State state income tax withholding taxes attributed to qualified employees employed by a qualified business or qualified brewer that is greater than the base level for the qualified business or qualified brewer.
Sec. 5. 36 MRSA §6753, sub-§10-A is enacted to read:
10-A. Qualified brewer. "Qualified brewer" means a for-profit business in this State that produces malt liquor for resale and that adds one or more qualified employees above its base level of employment in this State.
Sec. 6. 36 MRSA §6753, sub-§12, as amended by PL 2005, c. 351, §23 and affected by §26, is further amended to read:
12. Qualified employees. "Qualified employees" means new, full-time employees hired in this State by a qualified business or qualified brewer and for whom a retirement program subject to the Employee Retirement Income Security Act of 1974, 29 United States Code, Sections 101 to 1461, as amended, and group health insurance are provided, and whose income derived from employment with the applicant, calculated on a calendar year basis, is greater than the most recent annual per capita personal income in the county in which the qualified employee is employed and whose state income withholding taxes are subject to reimbursement to the qualified business or qualified brewer under this chapter. "Qualified employees" does not include employees shifted to a qualified business or qualified brewer from an affiliated business. The commissioner shall determine whether a shifting of employees has occurred.
Sec. 7. 36 MRSA §6754, as amended by PL 2005, c. 622, §32 and affected by §33, is further amended to read:
1. Generally. Subject to the provisions of subsection 2, a qualified business or qualified brewer is entitled to reimbursement of state income withholding taxes withheld during the calendar year for which reimbursement is requested and attributed to qualified employees after July 1, 1996 in the following amounts.A. For qualified employees employed by a qualified business in state labor market areas in which the labor market unemployment rate is at or below the state unemployment rate at the time of application, the reimbursement is equal to 30% of withholding taxes withheld during each of the first 5 calendar years for which reimbursement is requested and attributed to those qualified employees. The percentage of reimbursement for the 6th to 10th years of the employment tax increment financing development program is established based upon the labor market unemployment rate at the beginning of the 6th year.
B. For qualified employees employed by a qualified business in state labor market areas in which the labor market unemployment rate is greater than the state unemployment rate at the time of application, the reimbursement is equal to 50% of withholding taxes withheld during each of the first 5 calendar years for which reimbursement is requested and attributed to those qualified employees. The percentage of reimbursement for the 6th to 10th years of the employment tax increment financing development program is established based upon the labor market unemployment rate at the beginning of the 6th year.
C. For qualified employees employed by a qualified business in state labor market areas in which the labor market unemployment rate is greater than 150% of the state unemployment rate at the time of application, the reimbursement is equal to 75% of withholding taxes withheld during each of the first 5 calendar years for which reimbursement is requested and attributed to those qualified employees. The percentage of reimbursement for the 6th to 10th years of the employment tax increment financing development program is established based upon the labor market unemployment rate at the beginning of the 6th year.
D. For qualified Pine Tree Development Zone employees, as defined in Title 30-A, section 5250-I, subsection 18, employed directly in the qualified business activity of a qualified Pine Tree Development Zone business, as defined in Title 30-A, section 5250-I, subsection 17, for whom a certificate of qualification has been issued in accordance with Title 30-A, section 5250-O, the reimbursement under this subsection is equal to 80% of the withholding taxes withheld each year for which reimbursement is requested and attributed to those qualified employees for a period of no more than 10 years. In no event may reimbursement under this subsection be paid for years beginning after December 31, 2018.
E. For qualified employees hired by a qualified brewer, the reimbursement is equal to 50% of withholding taxes withheld during each of the 10 tax years for which reimbursement is requested and attributed to those qualified employees. In no event may reimbursement under this subsection be paid for years beginning after December 31, 2017.
2. Limitations. Reimbursement to a qualified business or qualified brewer under this chapter is subject to the following limitations.A. A business previously qualified and approved by the commissioner may not receive reimbursement under this chapter for any period of time in which it failed to maintain the minimum requirements for initial approval as a qualified business or qualified brewer.
B. Reimbursement to a qualified business approved pursuant to this chapter expires 10 years after the date on which benefits commenced under the employment tax increment financing development program.
C. A business electing to take the jobs and investment tax credit under section 5215 may not claim reimbursement under this chapter until the full amount of allowable jobs and investment tax credit benefits have been claimed. This limitation does not apply to claims for reimbursement of withholding for qualified Pine Tree Development Zone employees as defined in Title 30-A, section 5250-I, subsection 18, if those employees and any investment in the related Pine Tree Development Zone are not included in calculating the jobs and investment tax credit under section 5215.
D. A business may not claim reimbursement under this chapter for income withholding taxes attributed to employees employed within any state tax increment financing district approved under Title 30-A, chapter 206.
E. Employee payroll withholding amounts are limited to the standard amount required to be withheld pursuant to chapter 827 and may not include any excess withholding.
F. The aggregate annual retained employment tax increment revenues for all employment tax increment financing programs may not exceed $20,000,000, adjusted by a factor equal to the percentage change in the United States Bureau of Labor Statistics Consumer Price Index, United States City Average, from January 1, 1996 to the date of calculation.
3. Multiple labor market areas. The commissioner may by rule establish procedures for equitably apportioning reimbursement to a qualified business or qualified brewer employing qualified employees in multiple labor market areas in the State.
Sec. 8. 36 MRSA §6755, first ¶, as enacted by PL 1995, c. 669, §5, is further amended to read:
A qualified business or qualified brewer that applies to the commissioner for approval of its employment tax increment financing program shall submit, in a form acceptable to the commissioner, the following information:
Sec. 9. 36 MRSA §6758, as amended by PL 2005, c. 351, §25 and affected by §26, is further amended to read:
1. Reporting by qualified businesses and qualified brewers. On or before April 15th of each year, each qualified business and each qualified brewer approved by the commissioner pursuant to this chapter shall report the number of employees, the state income taxes withheld for the immediately preceding calendar year and any further information the State Tax Assessor may reasonably require.
2. Determination by assessor. On or before June 30th of each year, the assessor shall determine the employment tax increment of each qualified business and qualified brewer for the preceding calendar year. A qualified business or qualified brewer may receive up to 80% of the employment tax increment generated by that business as determined by the assessor, subject to the further limitations in section 6754, subsection 2. That amount is referred to as "retained employment tax increment revenues."
3. Deposit and payment of revenue. On or before June 30th of each year, the Commissioner of Administrative and Financial Services shall deposit an amount equal to the total retained employment tax increment revenues for the preceding calendar year for approved employment tax increment financing programs in the state employment tax increment contingent account established, maintained and administered by the Commissioner of Administrative and Financial Services. On or before July 31st of each year, the Commissioner of Administrative and Financial Services shall pay to each approved qualified business and approved qualified brewer an amount equal to the retained employment tax increment revenues for the preceding calendar year.
Sec. 10. 36 MRSA §6760, sub-§2, ¶A, as enacted by PL 1995, c. 669, §5, is amended to read:
A. A person, which may include a qualified business or qualified brewer, to whom the record belongs or pertains has requested be designated confidential; or
Sec. 11. 36 MRSA §6761, as enacted by PL 1995, c. 669, §5, is amended to read:
This chapter may not be construed to limit the authority of the State Tax Assessor to conduct an audit of a qualified business or qualified brewer. When it is determined by the State Tax Assessor upon audit that a qualified business or qualified brewer has received a distribution larger than that to which it is entitled under this chapter, the overpayment must be applied against subsequent distributions, unless it is determined that the overpayment is the result of fraud on the part of the qualified business or qualified brewer, in which case the State Tax Assessor may disqualify the business from receiving any future distributions. When there is no subsequent distribution, the qualified business or qualified brewer to which overpayments were made is liable for the amount of the overpayments and may be assessed pursuant to provisions of Part 1.
Sec. 12. 36 MRSA §6762 is enacted to read:
Unless the commissioner certifies to the Legislature by March 1, 2011 that the total number of new qualified employees of qualified brewers statewide for which reimbursement was made under this chapter for calendar year 2010 exceeds the number of full-time equivalent employees of qualified brewers statewide for calendar year 2007 by 10%, a qualified brewer may not claim reimbursement as a qualified brewer under this chapter for income tax withholding periods beginning on or after March 1, 2011.
SUMMARY
This bill provides tax incentives to malt liquor brewers to encourage them to increase their employment in Maine and the amount of malt liquor produced in Maine and exported for sale outside of Maine. Specifically, this bill:
1. Provides a tax credit against the excise taxes imposed on alcohol manufactured and sold in Maine by a brewer equal to 17.5¢ per gallon of malt liquor manufactured and exported by that brewer. This tax credit is limited to 50% of the amount of excise taxes due from a brewer. The percentage of malt liquor that is eligible for the credit is 90% of the amount produced and exported and is reduced by 10% each year. If a brewer increases its production and export of malt liquor by 10% in a year, an additional credit is allowed for the excess; and
2. Expands the employment tax increment financing program to provide an enhanced reimbursement for qualified brewers who add qualified employees.
The bill also provides that the excise tax credit and enhanced employment tax increment financing reimbursement are repealed March 1, 2011 unless the Commissioner of Economic and Community Development certifies that the number of new employees of qualified brewers for which reimbursement was made in 2010 has increased at least 10% over total 2007 employment.