An Act To Conform the Maine Tax Laws for 2007 to the United States Internal Revenue Code
Maine Legislature, Session 123, LD 2145
Committee Amendment CA_A_H942 (House)
Amends: 36 MRSA §5122

COMMITTEE AMENDMENT "A" to HP. 1524, L.D. 2145, Bill, "An Act To 
Conform the Maine Tax Laws for 2007 to the United States Internal Revenue Code" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Conform the Maine Tax Laws to the United States Internal 
Revenue Code' 
Amend the bill by striking out everything after the enacting clause and before the 
emergency clause and inserting the following: 
'Sec. 1. 36 MRSA §S122, sub-§l, ~, as amended by PL 2007, c. 240, Pt. CCC, 
§2 and affected by §4, is further amended to read: 
N. With respect to property placed in service during the taxable year, an amount 
equal to the net increase in depreciation or expensing attributable to: 
(1) For taxable years beginning on or after January 1,2002 but prior to January 1, 
2006, a 30% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 101 of the federal Job Creation and Worker Assistance Act of 2002, 
Public Law 107-147 with respect to property placed in service during the taxable 
year; 
(2) For taxable years beginning on or after January 1,2002 but prior to January 1, 
2006, a 50% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 201 of the federal Jobs and Growth Tax Relief Reconciliation Act of 
2003, Public Law 108-27 with respect to property placed in service during the 
taxable year; and 
(3) For taxable years beginning on or after January 1, 2003 but before January 1, 
2008, the increase in aggregate cost under Section 179 of the Code arising from 
amendments to the Code applicable to tax years beginning on or after January 1, 
2003; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,A" to H.P. 1524, L.D. 2145 
Sec. 2. 36 MRSA §5122, sub-§1, ~, as amended by PL 2007, c. 539, Pt. CCC, 
§2, is further amended to read: 
X. 
An amount equal to the taxpayer's federal deduction relating to income 
attributable to domestic production activities claimed in accordance with Section 102 
of the federal American Jobs Creation Act of 2004, Public Law 108-357; and 
Sec. 3. 36 MRSA §5122, sub-§1, ~, as amended by PL 2007, c. 539, Pt. eee, 
§3, is further amended to read: 
Y. Any amount of allowable deduction claimed for federal purposes in accordance 
with the election under Section 642(g) of the Code that is also used to determine the 
taxable estate for purposes of calculating the Maine estate tax under chapter 575~~ 
Sec. 4. 3(j MRSA §5122, sub-§1, ~Z, as enacted by PL 2007, c. 539, Pt. CCC, 
§4, is repealed. 
Sec. 5. 36 MRSA §5122, sub-§1, ~AA, as enacted by PL 2007, c. 539, Pt. cec, 
§5, is repealed. 
Sec. 6. 3(j MRSA §5122, sub-§2, ~, as amended by PL 2007, c. 539, Pt. cec, 
§6, is further amended to read: 
Y. The portion of contributions to a qualified tuition program established under 
Section 529 ofthe Code up to $250 per designated beneficiary. This deduction may 
not be claimed on returns when federal adjusted gross income exceeds $100,000 for 
returns with a filing status of single or married filing separately or $200,000 for 
returns with a filing status of married joint or head of household; and 
Sec. 7. 36 MRSA §5122, sub-§2, ~Z, as amended by PL 2007, c. 539, Pt. cec, 
§7, is further amended to read: 
Z. For income tax years beginning on or after January 1,2006, to the extent included 
in federal adjusted gross income and not otherwise removed from Maine taxable 
income, an amount equal to the total of capital gains and ordinary income resulting 
from depreciation recapture determined in accordance with the Code, Sections 1245 
and 1250 that is realized upon the sale of property certified as multifamily affordable 
housing property by the Maine State Housing Authority in accordance with Title 30-
A, section 4722, subsection 1, paragraph AA~~ 
Sec. 8. 36 MRSA §5122, sub-§2, ~AA, as enacted by PL 2007, c. 539, Pt. CCC, 
§8, is repealed. 
Sec. 9. 36 MRS A §5125, sub-§3, ~, as amended by PL 2007, c. 539, Pt. CCC, 
§9, is further amended to read: 
D. 
Reduced by any amount attributable to interest or expenses incurred in the 
production of income exempt from tax under this Part; and 
Sec. 10. 36 MRS A §5125, sub-§3,~, as amended by PL 2007, c. 539, Pt. eec, 
§ 1 0, is further amended to read: 
E. Reduced by the amount attributable to any contribution that qualified for and was 
actually utilized as a credit under section 52 1 6-C;--lmd~ 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,-A:' to H.P. 1524, L.D. 2145 
Sec. 11. 36 MRSA §S12S, sub-§3, ~, as enacted by PL 2007, c. 539, Pt. CCC, 
§ 11, is repealed. 
Sec. 12. 36 MRSA §SI64, sub-§I, as amended by PL 2007, c. 539, Pt. CCC, §12, 
is further amended to read: 
1. Fiduciary adjustment defined. The fiduciary adjustment is the net amount of the 
modifications described in section 5122, including subsection 3 if the estate or trust is a 
beneficiary of another estate or trust, which relates to items of income or deduction of an 
estate or trust. Income taxes imposed by this State or any other taxing jurisdiction, 
mortgage insurance premiums paid or accrued on or after January 1, 2008 and claimed as 
a deduction pursuant to the Code, Section 163(h)(3)(E) and interest or expenses incurred 
in the production of income exempt from tax under this Part deducted in arriving at 
federal taxable income must be added back to the fiduciary adjustment. Interest or 
expenses incurred in the production of income taxable under this Part but exempt from 
federal income tax must be subtracted from the fiduciary adjustment. 
Sec. 13. 36 MRSA §S200-A, sub-§I, ~, as amended by PL 2007, c. 240, Pt. 
CCC, §3 and affected by §4, is further amended to read: 
N. With respect to property placed in service during the taxable year, an amount 
equal to the net increase in depreciation or expensing attributable to: 
(1) For taxable years beginning on or after January 1, 2002 but prior to January 1, 
2006, a 30% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 101 of the federal Job Creation and Worker Assistance Act of 2002, 
Public Law 107-147 with respect to property placed in service during the taxable 
year; 
(2) For taxable years beginning on or after January 1,2002 but prior to January 1, 
2006, a 50% bonus depreciation deduction claimed by the taxpayer pursuant to 
Section 201 of the federal Jobs and Growth Tax Relief Reconciliation Act of 
2003, Public Law 108-27 with respect to property placed in service during the 
taxable year; and 
(3) For taxable years beginning on or after January 1, 2003 but before January I, 
2008, the increase in aggregate cost under Section 179 of the Code arising from 
amendments to the Code applicable to tax years beginning on or after January 1, 
2003; 
Sec. 14. 36 MRSA §S200-A, sub-§I, V, as amended by PL 2007, c. 539, Pt. 
CCC, § 13, is further amended to read: 
P. The amount of the loan repayment included in the credit base of the recruitment 
credit under section 5219-V to the extent that the contribution has been used to adjust 
federal taxable income; and 
Sec. 15. 36 MRSA §S200-A, sub-§I, ,S, as amended by PL 2007, c. 539, Pt. 
CCC, § 14, is further amended to read: 
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COMMITTEE AMENDMENT 'A" to H.P. 1524, L.D. 2145 
S. 
An amount equal to the taxpayer's federal deduction relating to income 
attributable to domestic production activities claimed in accordance with Section 102 
of the federal American Jobs Creation Act of2004, Public Law 108-357t-aOO.:. 
Sec. 16. 36 MRS A §S200-A, sub-§1, ff, as enacted by PL 2007, c. 539, Pt. 
CCC, § 15, is repealed. 
Sec. 17. 36 MRSA §S200-A, sub-§2, W, as amended by PL 2007, c. 539, Pt. 
CCC, § 16, is further amended to read: 
P. 
For income tax years beginning on or after January 1, 2015, the gain 
attributable to the sale of sustainably managed, eligible timberlands as 
calculated pursuant to this paragraph. 
(1) As used in this paragraph, unless the context otherwise indicates, the 
following terms have the following meanings. 
(a) "Commercial harvesting" or "commercially harvested" means the 
harvesting of forest products that have commercial value. 
(b) "Eligible timberlands" means land of at least 10 acres located in 
the State and used primarily for the growth of trees to be commercially 
harvested. 
Land that would otherwise be included within this 
definition may not be excluded because of: 
(i) Use of the land for multiple public recreation activities; 
(ii) Statutory or governmental restrictions that prevent commercial 
harvesting of trees or require a primary use of the land other than 
commercial harvesting; 
(iii) 
Deed restrictions, restnctive covenants or organizational 
charters that prevent commercial harvesting of trees or require a 
primary use of land other than commercial harvesting and that 
were effective prior to January 1, 1982; or 
(iv) Past or present multiple use for mineral exploration. 
(c) 
"Forest products that have commercial value" means logs, 
pulpwood, veneer, bolt wood, wood chips, stud wood, poles, pilings, 
biomass, fuel wood, Christmas trees, maple syrup, nursery products 
used for ornamental purposes, wreaths, bough material or cones or 
other seed products. 
(d) "Sustainably managed" means: 
(i) A forest management and harvest plan, as defined in section 
573, subsection 3-A, has been prepared for the eligible timberlands 
and has been in effect for the entire time period used to compute 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,4, to H.P. 1524, L.D. 2145 
the amount of the subtraction modification under this paragraph; 
and 
(ii) The taxpayer has received a written statement from a licensed 
forester certifying that, as of the time of the sale, the eligible 
timberlands have been managed in accordance with the plan under 
subdivision (i) during that period. 
(2) To the extent included in the taxpayer's taxable income under the laws 
of the United States, the taxable income of the taxpayer under the laws of 
the United States must be decreased by: 
(a) For eligible timberlands held by the taxpayer for at least a IO-year 
period beginning on or after January 1,2005 but less than an II-year 
period beginning on or after January 1, 2005, 1115 of the gain 
recognized on the sale of the eligible timberlands; 
(b) For eligible timberlands held by the taxpayer for at least an II-year 
period beginning on or after January 1, 2005 but less than a I2-year 
period beginning on or after January 1, 2005, 2115 of the gain 
recognized on the sale of the eligible timberlands; 
(c) For eligible timberlands held by the taxpayer for at least a 12-year 
period beginning on or after January 1, 2005 but less than a 13-year 
period beginning on or after January 1, 2005, 115 of the gain 
recognized on the sale of the eligible timberlands; 
(d) For eligible timberlands held by the taxpayer for at least a 13-year 
period beginning on or after January 1, 2005 but less than a I4-year 
period beginning on or after January 1, 2005, 4115 of the gain 
recognized on the sale of the eligible timberlands; 
(e) For eligible timberlands held by the taxpayer for at least a 14-year 
period beginning on or after January 1, 2005 but less than a I5-year 
period beginning on or after January 1, 2005, 1/3 of the gain 
recognized on the sale of the eligible timberlands; 
(f) For eligible timberlands held by the taxpayer for at least a 15-year 
period beginning on or after January 1, 2005 but less than a 16-year 
period beginning on or after January 1, 2005, 2/5 of the gain 
recognized on the sale of the eligible timberlands; 
(g) For eligible timberlands held by the taxpayer for at least a 16-year 
period beginning on or after January 1, 2005 but less than a 17-year 
period beginning on or after January 1, 2005, 7115 of the gain 
recognized on the sale of the eligible timberlands; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "fJr to H.P. 1524, L.D. 2145 
(h) For eligible timberlands held by the taxpayer for at least a 17-year 
period beginning on or after January 1, 2005 but less than an 18-year 
period beginning on or after January 1, 2005, 8115 of the gain 
recognized on the sale of the eligible timberlands; 
(i) For eligible timberlands held by the taxpayer for at least an 18-year 
period beginning on or after January 1, 2005 but less than a 19-year 
period beginning on or after January 1, 2005, 3/5 of the gain 
recognized on the sale of the eligible timberlands; 
(j) For eligible timberlands held by the taxpayer for at least a 19-year 
period beginning on or after January 1, 2005 but less than a 20-year 
period beginning on or after January 1, 2005, 2/3 of the gain 
recognized on the sale of the eligible timberlands; 
(k) For eligible timberlands held by the taxpayer for at least a 20-year 
period beginning on or after January 1, 2005 but less than a 21-year 
period beginning on or after January 1, 2005, 11115 of the gain 
recognized on the sale of the eligible timberlands; 
(1) For eligible timberlands held by the taxpayer for at least a 21-year 
period beginning on or after January 1, 2005 but less than a 22-year 
period beginning on or after January 1, 2005, 4/5 of the gain 
recognized on the sale of the eligible timberlands; 
(m) For eligible timberlands held by the taxpayer for at least a 22-year 
period beginning on or after January 1, 2005 but less than a 23-year 
period beginning on or after January 1, 2005, 13115 of the gain 
recognized on the sale of the eligible timberlands; 
(n) For eligible timberlands held by the taxpayer for at least a 23-year 
period beginning on or after January 1, 2005 but less than a 24-year 
period beginning on or after January 1, 2005, 14/15 of the gain 
recognized on the sale of the eligible timberlands; or 
(0) For eligible timberlands held by the taxpayer for at least a 24-year 
period beginning on or after January 1,2005, all of the gain recognized 
on the sale of the eligible timberlands. 
(3) Taxpayers claiming this credit must attach a sworn statement from a forester 
licensed pursuant to Title 32, chapter 76 that the timberlands for which the credit 
is claimed have been managed sustainably. 
For the purposes of this 
subparagraph, "sustainably" means that the timberlands for which the credit is 
claimed have been managed to protect soil productivity and to maintain or 
improve stand productivity and timber quality; known occurrences of threatened 
or endangered species and rare or exemplary natural communities; significant 
wildlife habitat and essential wildlife habitat; and water quality, wetlands and 
riparian zones.Upon request of the State Tax Assessor, the Director of the Bureau 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ''f+-'' to H.P. 1524, L.D. 2145 
of Forestry within the Department of Conservation may provide assistance in 
determining whether timberlands for which the credit is claimed have been 
managed sustainably. When assistance is requested under this subparagraph, the 
director or the director's designee may enter and examine the timberlands for the 
purpose of determining whether the timberlands have been managed sustainably. 
In the case of timberlands owned by an entity that is treated as a pass-through entity 
for income tax purposes, the land must be treated as eligible timberland if ownership 
and use of the land by the pass-through entity satisfies the requirements of this 
paragraph. If the owner of the eligible timberlands is an S corporation, the taxpayer 
must subtract the owner's pro rata share of the gain. If the owner of the timberlands 
is a partnership or limited liability company taxed as a partnership, the taxpayer must 
subtract the taxpayer's distributive share of the gain, subject to the percentage 
limitations provided in this paragraph. 
This modification may not reduce Maine taxable income to less than zero. To the 
extent this modification results in Maine taxable income that is less than zero for the 
taxable year, the excess negative modification amount may be carried forward and 
applied as a subtraction modification for up to 10 taxable years. The entire amount of 
the excess negative modification must be carried to the earliest of the taxable years to 
which, by reason of this subsection, the negative modification may be carried and 
then to each of the other taxable years to the extent the unused negative modification 
is not used for a prior taxable year. Earlier carry-forward modifications must be used 
before newer modifications generated in later years; and 
Sec. 18. 36 MRSA §S200-A, sub-§2, ~Q, as amended by PL 2007, c. 539, Pt. 
CCC, § 17, is further amended to read: 
Q. For income tax years beginning on or after January 1,2006, to the extent included 
in federal taxable income and not otherwise removed from Maine taxable income, an 
amount equal to the total of capital gains and ordinary income resulting from 
depreciation recapture determined in accordance with the Code, Sections 1245 and 
1250 that is realized upon the sale of property certified as multifamily affordable 
housing property by the Maine State Housing Authority in accordance with Title 30-
A, section 4722, subsection 1, paragraph AA~~ 
Sec. 19. 36 MRSA §S200-A, sub-§2, ~, as enacted by PL 2007, c. 539, Pt. 
CCC, § 18, is repealed. 
Sec. 20. Application. This Act applies to tax years beginning on or after January 
1, 2007 and to any prior years as specifically provided by the United States Internal 
Revenue Code of 1986 except that those sections that amend the Maine Revised Statutes, 
Title 36, section 5122, subsection 1, paragraph N and section 5200-A, subsection 1, 
paragraph N apply to tax years beginning on or after January 1,2008.' 
SUMMARY 
This amendment provides for full conformity with the United States Internal Revenue 
Code through February 13, 2008 and includes provisions relating to the expensing of 
business equipment under Section 179 ofthe Code. 
FISCAL ;\OTE REQUIRED 
(See artached) 
COMMITTEE AMENDMENT 
Approved: 04/04/08 p/ac. 
LD 2145 
LR 3081(02) 
An Act To Conform the Maine Tax Laws for 2007 to the United States Internal Revenue Code 
Net Cost (Savings) 
General Fund 
Revenue 
General Fund 
Fiscal Note for Bill as Amended by Committee Amendment 'A " 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
2008-09 
Projections 
2009-10 
Projections 
2010-11 
$2,434,723 
$32,423,944 
($1,163,592) 
($7,851,500) 
($2,434,723) 
($32,423,944) 
Other Special Revenue Funds 
($130,844) 
($1,742,488) 
$1,163,592 
$63,825 
$7,851,500 
$430,673 
Fiscal Detail and Notes 
The General Fund revenue loss associated with conforming to the United States Internal Revenue Code as of February 
13, 2008 is estimated to be $2,434,723 in fiscal year 2007-08 and $32,423,944 in fiscal year 2008-09. 
LR3081 (02) - Fiscal Note - Page I of I