An Act To Lower the Individual Income Tax Incrementally to Zero
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5111, sub-§6 is enacted to read:
6. Incremental reduction. For tax years beginning on or after January 1, 2016, taxes calculated under subsections 1-D, 2-D or 3-D are reduced by 25%.
A. Beginning in 2017, the State Tax Assessor shall determine annually by September 15th whether General Fund revenue received in the previous fiscal year exceeds the General Fund revenue received in fiscal year 2014-15. If the State Tax Assessor determines that General Fund revenue received in the preceding fiscal year exceeds the General Fund revenue received in fiscal year 2014-15, the tax due under this section for tax years beginning on or after January 1st of the succeeding calendar year is reduced by 50%.
B. Beginning in the year following implementation of a reduction in taxes under paragraph A, the State Tax Assessor shall determine by September 15th whether General Fund revenue received in the previous fiscal year exceeds the General Fund revenue received in the fiscal year preceding the fiscal year in which the reduction under paragraph A first took effect. If the State Tax Assessor determines that General Fund revenue received in the preceding fiscal year exceeds the General Fund revenue received in the fiscal year preceding when the reduction under paragraph A first took effect, the tax due under this section for tax years beginning on or after January 1st of the succeeding calendar year is reduced by 75%.
C. Beginning in the year following implementation of a reduction in taxes under paragraph B, the State Tax Assessor shall determine by September 15th whether General Fund revenue received in the previous fiscal year exceeds the General Fund revenue received in the fiscal year preceding the fiscal year in which the reduction under paragraph B first took effect. If the State Tax Assessor determines that General Fund revenue received in the preceding fiscal year exceeds the General Fund revenue received in the fiscal year preceding when the reduction under paragraph B first took effect, the tax due under this section for tax years beginning on or after January 1st of the succeeding calendar year is reduced by 100%.
Sec. 2. Legislation implementing reduction of individual income tax. By January 1, 2016, the Department of Administrative and Financial Services, Bureau of Revenue Services shall submit to the Joint Standing Committee on Taxation any draft legislation necessary to implement the incremental reduction to the individual income tax as provided in this Act. The committee may report out legislation to implement this Act to the Second Regular Session of the 127th Legislature.
SUMMARY
This bill provides for the phase-out of the individual income tax.