An Act To Exempt Military Pensions for Future Military Retirees from State Income Tax
Maine Legislature, Session 122, LD 0972
Committee Amendment CA_A_H191 (House)
Amends: 36 MRSA §5122

COMMITTEE AMENDMENT ,A" to H.P. 682, L.D. 972, Bill, "An 
Act To Exempt Military Pensions for Future Military Retirees from 
State Income Tax" 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'Sec. I. 36 MRSA §5122, sub-§2, 11M, as amended by PL 2003, c. 
391, §5, is further amended to read: 
M. 
For each individual 
who 
is 
a 
primary recipient of 
benefits under an employee retirement plan, the amount of 
military retirement benefits under 
a military retirement 
plan for military personnel retiring during any tax year 
beginning on or after January 1, 2006 to the extent included 
in federal adjusted gross income plus an amount that is the 
lesser of: 
(1) 
Six thousand dollars reduced by the total amount 
of 
the 
individual's 
social 
security 
benefits 
and 
railroad retirement benefits paid by the United States, 
but not less than $0. 
The reduction does not apply to 
benefits paid under a military retirement plan; or 
(2) 
The 
aggregate 
of 
benefits 
under 
employee 
retirement plans included in the individual's federal 
adjusted gross 
income, 
excluding military retirement 
benefits under a military retirement plan for military 
Page l-LR1l78(2) 
COMMITTEE AMENDMENT 
..,-'" 
COMMITTEE AMENDMENT t4 " to H.P. 682, L.D. 972 
personnel retiring during any tax year beginning on or 
after January 1, 2006. 
For purposes of this paragraph, the following terms have the 
following 
meanings. 
"Primary 
recipient" 
means 
the 
individual upon whose earnings the employee retirement plan 
benefits 
are 
based 
or 
the 
surviving 
spouse 
of 
that 
individual. 
"Employee 
retirement 
plan" 
means 
a 
state, 
federal or military retirement plan or any other retirement 
benefit plan established and maintained by an employer for 
the benefit of its employees under the Code, Section 401(a), 
Section 403 or Section 457(b), 
except that distributions 
made pursuant to a section 457(b) plan are not eligible for 
the deduction provided by this paragraph if they are made 
prior 
to 
age 
and 
are 
not 
part 
of 
a 
series 
of 
substantially equal periodic payments made for the life of 
the primary recipient or the joint lives of the primary 
recipient 
and 
that 
recipient's 
designated 
beneficiary. 
"Employee retirement plan" does not include an individual 
retirement account under Section 408 of the Code, a Roth IRA 
under 
Section 
408A 
of 
the 
Code, 
a 
rollover 
individual 
retirement 
account, 
a 
simplified employee 
pension 
under 
Section 
408(k) 
of 
the 
Code 
or 
an 
ineligible deferred 
compensation 
plan 
under 
Section 
(f) 
of 
the 
Code. 
Benefits under an employee retirement plan do not include 
distributions that are subject to the tax imposed by the 
Code, 
Section 
(t) . 
"Military 
retirement 
plan" 
means 
benefits received as a result of service in the active or 
reserve components of the Army, Navy, Air Force, Marines or 
Coast Guard; 
Sec. 
2. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
ADMl:IUSTBATIVE AND FIHAHCIAL SERVICES, DEPARTMENT OF 
Maine Revenue Services 
0002 
following 
Ini tiati ve: 
Provides funds for the computer programming costs 
associated with the income tax exemption for certain military 
retirement plans. 
GENERAL F'U1ID 
All Other 
GENERAL FUND TOTAL 
2005-06 
$0 
$0 
2006-07 
$10,000 
$10,000' 
COMM/rrEE AMENDMENT 
COMMITTEE AMENDMENT fA" to H.P. 682, L.D. 972 
SUMMARY 
This 
amendment 
changes 
the 
bill 
to 
more 
accurately 
accomplish its intent. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 04/12/05 ~ae 
LD972 
LR 1178(02) 
An Act To Exempt Military Pensions for Future Military Retirees from State Income Tax 
Fiscal Note for Bill as Amended by Committee Amendment AI 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
2005-06 
$89,982 
$0 
($89,982) 
($4,936) 
2006-07 
$332,727 
$10,000 
($322,727) 
($17,702) 
Projections 
2007-08 
$575,300 
$0 
($575,300) 
($31,557) 
Projections 
2008-09 
$848,591 
$0 
($848,591) 
($46,547) 
Exempting military retirement plan income from the income tax is expected to reduce General Fund revenue by 
$89,982 in fiscal year 2005-06 and $322,727 in fiscal year 2006-07. This bill also includes a General Fund 
appropriation of$10,000 for Maine Revenue Services in fiscal year 2006-07 for the required computer programming 
associated with this change. 
LRI178(2) - Fiscal Note - Page 1 of 1