An Act To Provide an Income Tax Modification for the Federal Empowerment Zone Employment Credit
Maine Legislature, Session 122, LD 0598
Committee: Taxation
Sponsors: FISCHER, MARTIN, BROWNE, EDGECOMB, JACKSON, LUNDEEN, PARADIS, SHERMAN, SMITH, CLUKEY
Amends: 36 MRSA §5122

Legislative Document 
No. 598 
H.P.431 
House of Representatives, February 3, 2005 
An Act To Provide an Income Tax Modification for the Federal 
Empowerment Zone Employment Credit 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative FISCHER of Presque Isle. 
Cosponsored by Senator MARTIN of Aroostook and 
'17/~ frI· 7l?dC~{ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BROWNE of Vassalboro, EDGECOMB of Caribou, JACKSON of Fort Kent, 
LUNDEEN of Mars Hill, PARADIS of Frenchville, SHERMAN of Hodgdon, SMITH of Van 
Buren, Senator: CLUKEY of Aroostook. 
Printed on reL'ydeu p:.1pt:r 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §5122, sub-§2, ~Q, as corrected by RR 2003, c. 
1, §38, is amended to read: 
Q. 
A fraction of any amount previously added back by the 
taxpayer 
to 
federal 
adjusted 
gross 
income 
pursuant 
to 
subsection 1, paragraph N. 
(1) 
With respect to property first placed in service 
during taxable years beginning in 2002, the adjustment 
under this paragraph is available for each year during 
the 
recovery 
period, 
beginning 
years 
after 
the 
beginning of the taxable year during which the property 
was first placed in service. 
The fraction is equal to 
the amount added back under subsection 1, paragraph N 
with respect to the property, divided by the number of 
years in the recovery period minus 2. 
(2) 
With 
respect 
to all 
other property, 
for 
the 
taxable year 
immediately following 
the taxable year 
during which the property was first placed in service, 
the fraction allowed by this paragraph is equal to 5°" 
of the amount added back under SUbsection 1, paragraph 
N with respect to the property. 
For each subsequent 
taxable year during the recovery period, the fraction 
is 
equal 
to 
95% 
of 
the 
amount 
added 
back 
under 
subsection 1, paragraph N with respect to the property, 
divided by the number of years in the recovery period 
minus 2. 
In the case of property expensed pursuant to Section 179 of 
the Code, 
the term "recovery period" means 
the recovery 
period that would have been applicable to the property had 
Section 179 not been applied; aBe 
Sec. 2. 36 MRSA §5122, sub-§2, fi', as amended by PL 2003, c. 
70S, §12 and affected by §14, is further amended to read: 
SO 
T. 
For income tax years beginning on or after January 1, 
2002 and before January 1, 
2004, 
an amount equal to the 
total premiums spent for long-term care insurance policies 
certified under Title 24-A, section 507S-A as long as the 
amount subtracted is reduced by the long-term care premiums 
claimed as an itemized deduction pursuant to section 5l2S. 
For income tax years beginning on or after January 1, 2004, 
an amount equal to the total premiums spent for qualified 
long-term care insurance contracts certified under Title 
24-A, section S07S-A, as long as the amount subtracted is 
Page l-LR0476(l) 
reduced by any amount claimed as a deduction for federal 
income tax purposes in accordance with the Code, 
Section 
162(1) 
and by the long-term care premiums claimed as an 
itemized deduction pursuant to section 5l25T; and 
Sec. 3. 36 MRSA §5122, sub-§2, 1fU is enacted to read: 
U. 
An amount equal to the taxpayer's federal empowerment 
zone employment credi t as determined under the laws of the 
United States. 
Sec. 4. Application. 
This Act applies to tax years beginning 
on or after January 1, 2005. 
SUMMARY 
Current law allows a business to deduct from its income for 
Maine 
income tax purposes 
an 
amount 
equal to the business's 
federal new jobs credit or work opportunity credit. 
This bill 
allows a business also to deduct any amount received under the 
federal 
empowerment 
zone 
employment 
credit 
program, 
which 
provides tax incentives to businesses who hire employees who live 
and work in federally designated "empowerment zones."