An Act To Reduce Payments under the Business Equipment Tax Reimbursement Program and To Eliminate Double Dipping and Increase Conformity with the Internal Revenue Code
Maine Legislature, Session 122, LD 1400
Committee: Taxation
Sponsors: MILLS
Amends: 36 MRSA §5122, 36 MRSA §6652

Legislative Document 
No. 1400 
S.P.489 
In Senate, March 22, 2005 
An Act To Reduce Payments under the Business Equipment Tax 
Reimbursement Program and To Eliminate Double Dipping and 
Increase Conformity with the Internal Revenue Code 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator MILLS of Somerset. 
Printed on recyc led paper 
JOY J. O'BRIEN 
Secretary of the Senate 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA *4062, sub-*I-A. ~A, as amended by PL 2003, c. 
673, Pt. D, §1, is further amended to read: 
A. 
For the estates of decedents dying after December 31, 
2002, 
"federal credit" means the maximum credit for state 
death taxes determined under the Code, Section 2011 as of 
December 31, 2002 exclusive of the reduction of the maximum 
credit contained in the Code, Section 2011(b)(2); the period 
of limitations under 
the 
Code, 
Section 2011(c); 
and the 
termination 
provis ion 
contained 
in 
the 
Code, 
Section 
2011(f). 
The adjusted taxable estate is to be determined 
using the applicable Code as of the date of the decedent's 
death, except that the state death tax deduction contained 
in the Code, Section 2058 is to be disregarded. 
The unified 
credi t is to be determined under the Code, Section 2010 as 
eE-~eeemget-~lT-6GGG; and 
Sec. 2. 36 MRSA *5122. sub-*I, ~S. as corrected by RR 2003, c. 
2, §117, is amended to read: 
S. 
For tax years beginning in 2003, 
2004 
and 2005, 
the 
amount 
received 
from 
the 
National 
Health 
Service 
Corps 
Scholarship Program and the Armed Forces Health Professions 
Scholarship and Financial Assistance program to the extent 
excluded from federal gross income in accordance with the 
Code, Section 117; and 
Sec. 3. 36 MRSA §5122, sub-§I,~, as amended by PL 2003, c. 
705, §8, is further amended to read: 
V. 
For tax years beginning on or after January 1, 2003 and 
before January 1, 
2006, 
the 
amount claimed as 
a 
federal 
income adjustment for student loan interest under the Code, 
Section 62 
(a) (17), 
but only for interest paid after 
months from the start of the loan repayment periodT-aaa~ 
Sec. 4. 36 MRSA *5122. sub-*I, ~W, as enacted by PL 2003, c. 
705, §9, is repealed. 
Sec. 5. 36 MRSA §6652. sub-§I, as amended by PL 2003, c. 391, 
§12, is further amended to read: 
1. 
Generally. 
A 
person 
against 
whom 
taxes 
have 
been 
assessed pursuant to Part 2, except for chapters III and 112, 
with respect to eligible property and who has paid those taxes is 
enti tIed to reimbursement for 90°" of those taxes from the State 
as provided in this chapter. 
For purposes of this chapter, a tax 
applied as a credit against a tax assessed pursuant to chapter 
Page l-LR1l7 5 (1) 
or 112 is a tax assessed pursuant to chapter 111 or 112. 
Eligible property is subject to reimbursement pursuant to this 
chapter for up to 12 property tax years, but the 12 years must be 
reduced 
by 
one 
year 
for 
each 
year 
during which 
a 
taxpayer 
incl uded the same property in its investment credi t 
base under 
section 5219-D, 5219-E or 5219-M and claimed the credit provided 
in one or more of those sections on its income tax return, and 
reimbursement may not be made for taxes assessed in a year in 
which one or more of those credits is taken. 
A successor in 
interest of a person against whom taxes have been assessed with 
respect 
to 
eligible 
property 
is 
entitled 
to 
reimbursement 
pursuant to this section, whether the tax was paid by the person 
assessed or 
by the successor, 
as 
long as 
a 
transfer of the 
property in question to 
the 
successor 
has 
occurred 
and 
the 
successor is the owner of the property as of August 1st, of the 
year in which a claim for reimbursement may be filed pursuant to 
section 6654. 
For purposes of this paragraph, 
"successor in 
interest" 
includes 
the 
initial 
successor 
and 
any 
subsequent 
successor. 
When an eligible successor in interest exists, the 
successor is the only person to whom 
reimbursement under this 
chapter may be made with respect to the transferred property. 
Sec. 6. 36 MRSA §6652. sub-§2-A is enacted to read: 
2--:~---------Lj.Jnj. t~t.i9~_~d~~_~parti,tipation in tax 
increment 
financing. 
The reimbursement to which a 
taxpayer is entitled 
under subsection 1 must be reduced by the amount of taxes on the 
eligible property that have been returned, or will be returned, 
to 
the 
taxpayer 
by 
a 
municipality 
due 
to 
the 
taxpayer's 
participation in a municipal 
development district under Title 
30-A, chapter 206, subchapter 1. 
Sec. 7. Application. 
This Act applies to applications for 
reimbursement 
under 
the 
Business 
Equipment 
Tax 
Reimbursement 
program that are filed on or after August 1, 2006. 
SUMMARY 
This bill reduces reimbursement under the Business Equipment 
Tax Reimbursement, BETR, program to 90% of taxes paid and reduces 
BETR program reimbursement by the amount of reimbursement under a 
tax increment financing district. 
The bill also increases the State's conformity with the 
federal 
Internal 
Revenue 
Code 
by 
incorporating 
the 
federal 
exemption amount into the state estate tax and by conforming to 
the federal tax deductibility of health saving accounts.