An Act To Strengthen Maine's Craft Brewers
Maine Legislature, Session 123, LD 1105
Committee: Taxation
Sponsors: EDMONDS, PERRY, CUMMINGS, DUNN, FAIRCLOTH, PINGREE
Amends: 28-A MRSA §1, 36 MRSA §6753, 36 MRSA §6754, 36 MRSA §6755, 36 MRSA §6758, 36 MRSA §6760, 36 MRSA §6761, 36 MRSA §6762

Legislative Document 
No. 1105 
S.P.357 
March 6, 2007 
An Act To Strengthen Maine's Craft Brewers 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by President EDMONDS of Cumberland. 
Cosponsored by Senator PERRY of Penobscot and 
JOY J. O'BRIEN 
Secretary of the Senate 
Representatives: Speaker CUMMINGS of Portland, DUNN of Bangor, FAIRCLOTH of 
Bangor, PINGREE of North Haven. 
Printed on recycled paper 
Be it enacted by the People: o,f the State of Maine as follows: 
Sec. 1. 28-A MRSA §1'53 is enacted to read: 
§1653. Export tax credit 
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 I is entitled to a 
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credit in the amount of I7.5¢ 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 
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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. 
F or 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 MRS A §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: 
§6754. Reimbursement allowed 
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 
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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 5250-1, subsection 18, employed directly in the qualified business activity of 
a qualified Pine Tree Development Zone business, as defined in Title 30-A, section 
5250-1, subsection 17, for whom a certificate of qualification has been issued in 
accordance with Title 30-A, section 5250-0, 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 
years. In no event may reimbursement under this subsection be paid for years 
beginn ing after December 3 I, 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 
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 
Pag~ 4 - 123LRG689(OI)-1 
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 5250-1, 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 I, 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: 
§6758. Procedure for reimbursement 
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." 
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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 31 st 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: 
§6761. Audit process 
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: 
§6762. Elimination of reimbursement of qualified brewers 
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, 20 II 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.