An Act To Reduce the Income Tax Burden on Maine Residents
Maine Legislature, Session 123, LD 1458
Committee: Taxation
Sponsors: CUMMINGS, EDMONDS, PIOTTI, VALENTINO
Amends: 36 MRSA §5111, 36 MRSA §1811

Legislative Document 
No. 1458 
H.P.1028 
House of Representatives, March 16,2007 
An Act To Reduce the Income Tax Burden on Maine Residents 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Speaker CUMMINGS of Portland. 
Cosponsored by President EDMONDS of Cumberland and 
Representatives: PIOTTI of Unity, VALENTINO of Saco. 
Printed on recycled paper 
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/J1.7!!d£~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 36 MRSA §5111, sub-§l-B, as enacted by PL 1999, c. 731, Pt. T, §3, 
is amended to read: 
I-B. Single individuals and married persons filing separate returns; tax years 
beginning 2002 but before 2007. For tax years beginning on or after January 1, 2002 
but before January 1. 2007, for single individuals and married persons filing separate 
returns: 
II 
If Maine Taxable income is: 
Less than $4,200 
At least $4,200 but less than $8,350 
At least $8,350 but less than $16,700 
$16,700 or more 
The tax is: 
2% of the Maine taxable income 
$84 plus 4.5% of the excess over $4,200 
$271 plus 7% ofthe excess over $8,350 
$856 plus 8.5% of the excess over 
$16,700 
Sec. A-2. 36 MRSA §5111, sub-§l-C is enacted to read: 
l-C. Single individuals and married persons filing separate returns; tax years 
beginning 2007. 
For tax years beginning on or after January I, 2007, for single 
individuals and married persons filing separate returns: 
If Maine Taxable income is: 
Less than $4,750 
At least $4,750 but less than $9,450 
At least $9,450 but less than $18,950 
$18,950 or more 
The tax is: 
2% of the Maine taxable income 
$95 plus 4.5% of the excess over $4,750 
$307 plus 7% of the excess over $9,450 
$972 plus 7.8% of the excess over 
$18,950 
Sec. A-3. 36 MRSA §5111, sub-§2-B, as enacted by PL 1999, c. 731, Pt. T, §5, 
is amended to read: 
2-B. Heads of households; tax years beginning 2002 but before 2007. For tax 
years beginning on or after January I, 2002 but before January I, 2007, for unmarried 
individuals or legally separated individuals who qualify as heads of households: 
Page I - 123LR2245(OI)-1 
I 
II 
If Maine Taxable income is: 
Less than $6,300 
At least $6,300 but less than $12,500 
At least $12,500 but less than $25,050 
$25,050 or more 
The tax is: 
2% of the Maine taxable income 
$126 plus 4.5% of the excess over $6,300 
$405 plus 7% of the excess over $12,500 
$1,284 plus 8.5% of the excess over 
$25,050 
Sec. A-4. 36 MRSA §Sl11, sub-§2-C is enacted to read: 
2-C. Heads of households; tax years beginning 2007. For tax years beginning on 
or after January I, 2007, for unmarried individuals or legally separated individuals who 
walify as heads of households: 
If Maine Taxable income is: 
Less than $7,150 
At least $7,150 but less than $14,200 
At least $14,200 but less than $28,450 
$28,450 or more 
The tax is: 
2% of the Maine taxable income 
$143 plus 4.5% of the excess over $7,150 
$460 plus 7% of the excess over $14,200 
$1,458 plus 7.8% of the excess over 
$28,450 
Sec. A-S. 36 MRSA §Sl11, sub-§3-B, as enacted by PL 1999, c. 731, Pt. T, §7, 
is amended to read: 
3-B. Individuals filing married joint return or surviving spouses; tax years 
beginning 2002 but before 2007. For tax years beginning on or after January I, 2002 
but before January I, 2007, for individuals filing married joint returns or surviving 
spouses permitted to file ajoint return: 
If Maine Taxable income is: 
Less than $8,400 
At least $8,400 but less than $16,700 
At least $16,700 but less than $33,400 
The tax is: 
2% of the Maine taxable income 
$168 plus 4.5% of the excess over $8,400 
$542 plus 7% of the excess over $16,700 
$33,400 or more 
$1,711 plus 8.5% of the excess over 
$33,400 
Sec. A-6. 36 MRSA §S111, sub-§3-C is enacted to read: 
3-C. Individuals filing married joint return or surviving spouses; tax years 
beginning 2007. For tax years beginning on or after January 1, 2007, for individuals 
filing married joint returns or surviving spouses permitted to file a joint return: 
If Maine Taxable income is: 
Less than $9,500 
At least $9,500 but less than $18,950 
At least $18,950 but less than $37,950 
$37,950 or more 
The tax is: 
2% of the Maine taxable income 
$190 plus 4.5% of the excess over $9,500 
$615 plus 7% of the excess over $18,950 
$1,945 plus 7.8% of the excess over 
$37,950 
Sec. A-7. 
Application. This Part applies to tax years beginning on or after 
January 1,2007. 
PART B 
Sec. B-1. 36 MRSA §S219-N, sub-§l, as amended by PL 2003, c. 390, §48, is 
further amended to read: 
1. 
Generally. Except as provided in subsection 2, an individual whose Maine 
taxable income determined as if the individual were a resident individual for the entire 
year is $2,000 $4,000 or less for single individuals, married individuals filing separately 
or heads of households and $8,000 or less for married individuals and surviving spouses 
filing joint returns is allowed a credit equal to the tax otherwise imposed on that 
individual by this Part. In HO ease may tHis This credit may not reduce the Maine income 
tax to less than zero. 
Sec. B-2. Application. This Part applies to tax years beginning on or after 
January 1, 2007. 
PART C 
Sec. C-1. 36 MRSA §1811, first ~, as amended by PL 2001, c. 439, Pt. TTTT, 
§2 and affected by §3, is further amended to read: 
A tax is imposed on the value of all tangible personal property and taxable services 
sold at retail in this State. The rate of tax is 7% on the value of liquor sold in licensed 
establishments as defined in Title 28-A, section 2, subsection 15, in accordance with Title 
28-A, chapter 43; +% 10% on the value of rental of living qUalters in any hotel, rooming 
house or tourist or trailer camp; 10% on the value of rental for a period of less than one 
year of an automobile; +% 9% on the value of prepared food; and 5% on the value of all 
other tangible personal property and taxable services. Value is measured by the sale 
price, except as otherwise provided. 
Sec. C-2. Effective date. This Part takes effect October 1, 2007. 
SUMMARY 
This bill reduces the income tax burden on Maine residents by: 
1. Reducing the top individual income tax rate from 8.5% to 7.8%; and 
2. 
Increasing the low-income tax credit from $2,000 to $4,000 for individuals, 
married individuals filing separately and heads of households and to $8,000 for married 
persons and surviving spouses filing joint returns. 
This bill offsets the loss of income tax revenue by increasing the rate of the sales tax 
imposed on prepared food from 7% to 9% and on short-term lodging from 7% to 10%.