An Act To Establish a Renewable Energy Tax Credit
Maine Legislature, Session 123, LD 1518
Committee: Taxation
Sponsors: BARTLETT, BRAUTIGAM, BRYANT, DAMON, HOBBINS, PERRY, STRIMLING, EBERLE
Amends: 36 MRSA §5219-B

Legislative Document 
No. 1518 
S.P.541 
March 20, 2007 
An Act To Establish a Renewable Energy Tax Credit 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator BARTLETT of Cumberland. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Representative BRAUTIGAM of Falmouth and Senators: BRYANT of 
Oxford, DAMON of Hancock, HOBBINS of York, PERRY of Penobscot, STRIMLING of 
Cumberland, Representative: EBERLE of South Portland. 
PrmteJ I)!l rt'i:ydeu paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §5219-BB is enacted to read: 
§5219-BB. Renewable energy tax credit 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Payroll" means the total amount paid in this State during the tax period by the 
taxpayer for compensation, including wages, pretax employee contributions made to 
a benefit package and employer contributions made to an enmlovee benefit package. 
B. "Property" means the average value of the taxpayer's real and tangible personal 
property that is owned or rented and used during the tax period. Property owned by 
the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at 
times the net annual rental rate. The net annual rental rate is the annual rental rate 
paid by the taxpayer. 
C. "Qualified business activity" means manufacturing renewable energy products or 
biofuel or conducting research and development in renewable energy. For purposes 
of this paragraph, "biofuel" has the same meaning as in section 52l9-X, subsection 1. 
2. Credit allowed. Except as provided by subsection 3, a taxpayer that is a business 
conducting a qualified business activity is allowed a credit in the amount of: 
A. One hundred percent of the tax that would otherwise be due under this Part for 
each of the first 5 tax years beginning with the tax year in which the taxpayer 
commences its qualified business activity; and 
B. Fifty percent of the tax that would otherwise be due under this Part for each of the 
tax years following the time period in paragraph A. 
3. Apportioned credit in certain circumstances. In the case of a business engaged 
in both qualified and nonqualified business activities in the State, the credit provided for 
in this section is limited to that portion that is attributable to the qualified business 
activity. The limitation is calculated by an apportionment. 
The apportionment is 
determined by a fraction, the numerator of which is the property value plus the payroll for 
the taxable year attributed to the qualified business activity of the business and the 
denominator of which is the statewide property value plus payroll for the taxable year of 
the business. 
If the qualified business is a taxable corporation that has affiliated groups, as defined in 
section 5102, subsection I-B, engaged in a unitary business, as defined in section 5102, 
subsection 10-A, the property and payroll values in the State of the unitary affiliated 
groups must be included in the apportionment fraction. The resulting fraction must be 
multiplied by the total tax liability otherwise due under this Part of the qualified business 
and those affiliated groups. 
If the apportionment provisions of this subsection do not fairly reflect the amount of the 
credit associated with the taxpayer's qualified business activity, the taxpayer may petition 
for, or the State Tax Assessor may require, in respect to all or any part of the taxpayer's 
I 
business activity, the employment of another reasonable method to effectuate an equitable 
apportionment of the credit associated with the taxpayer's qualified business activity. 
4. Members of pass-through entities. A member of a pass-through entity that 
conducts a qualified business activity is allowed a credit under this section based on the 
S 
tax due under this Part related to items of income, gain, deduction, loss or other items 
required to be reported by the pass-through entity to the member. For purposes of this 
subsection. "pass-through entity" means a corporation that for the applicable tax year is 
treated as an S corporation under the Code and a partnership, trust, limited liability 
company or similar entity that for the applicable tax year is not taxed as a C corporation 
for federal tax purposes; "member" means an individual or other owner of a pass-through 
II 
entity. 
5. Limitations. A taxpaver receiving a credit under this section may not receive a 
credit under section S219-X for the same business activity. The credit under this section 
may not reduce the tax due under this Part to less than zero. The credit provided by this 
IS 
section may not be claimed for tax years beginning on or after Januarv 1, 2019. 
Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 
2007. 
SUMMARY 
This bill provides a tax credit for a business engaged in the qualified business activity 
of manufacturing renewable energy products or biofuel or engaged in research and 
development in renewable energy equal to the income taxes otherwise due for S years and 
then SO% of the income taxes due for the next S years from when the business 
commences the qualified activity, similar to the credit given for Pine Tree Development 
Zone businesses.