An Act To Reduce Maine's Income Tax Rates by 50 Percent
Maine Legislature, Session 123, LD 0569
Committee: Taxation
Sponsors: SMITH, CLARK, MILLS, NUTTING, SNOWE-MELLO, TURNER, FITTS, HANLEY, RECTOR, SA VIELLO
Amends: 36 MRSA §5111, 36 MRSA §5200, 36 MRSA §5200-B

Legislative Document 
No. 569 
S.P. 181 
February 5, 2007 
An Act To Reduce Maine's Income Tax Rates by 50 Percent 
Reference to the Committee on Taxation suggested and ordered printed. 
JOY J. O'BRIEN 
Secretary of the Senate 
Presented by Senator SMITH of Piscataquis. 
Cosponsored by Representative CLARK of Millinocket and 
Senators: MILLS of Somerset, NUTTING of Androscoggin, SNOWE-MELLO of 
Androscoggin, TURNER of Cumberland, Representatives: FITTS of Pittsfield, HANLEY of 
Gardiner, RECTOR of Thomaston, SA VIELLO of Wilton. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §Sl11, 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, 2003, 2004, 2005 and 2006. 
For tax years beginning on or after 
Janual)' 1, in 2002, 2003, 2004, 2005 and 2006, for single individuals and married 
persons filing separate returns: 
If Maine Taxable income is: 
The tax 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 
2% of the Maine taxable income 
$84 plus 4.5% of the excess over $4,200 
$271 plus 7% of the excess over $8,350 
$856 plus 8.5% ofthe excess over 
$16,700 
Sec. 2. 36 MRSA §S111, 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 1, 2007, for single 
individuals and married persons filing separate returns: 
If Maine Taxable income is: 
The tax 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 
% of the Maine taxable income 
$42 plus 2.25% of the excess over $4,200 
$135 plus 3.5% of the excess over $8,350 
$428 plus 4.25% of the excess over 
$16,700 
Sec. 3. 36 MRSA §S111, 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, 2003, 2004, 2005 and 2006. 
For tax years beginning on or after Janual)' 1, in 2002, 2003, 2004, 2005 and 2006, for 
unmarried individuals or legally separated individuals who qualifY as heads of 
households: 
If Maine Taxable income is: 
The tax is: 
Page I - 123LR1469(Ol)-1 
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 
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. 4. 36 MRSA §5111 sub-§2-C is enacted to read: 
2-C. Heads of households; tax years beginning 2007. For tax years beginning on 
or after January 1, 2007, for unmarried individuals or legally separated individuals who 
qualify as heads of households: 
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: 
% of the Maine taxable income 
$63 plus 2.25% of the excess over $6,300 
$203 plus 3.5% of the excess over 
$12,500 
$642 plus 4.25% of the excess over 
$25,050 
Sec. 5. 36 MRSA §5111, 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, 2003, 2004, 2005 and 2006. 
For tax years beginning on or after 
January I, in 2002, 2003, 2004, 2005 and 2006, for individuals filing married joint 
returns or surviving spouses permitted to file a joint return: 
If Maine Taxable income is: 
The tax is: 
Less than $8,400 
At least $8,400 but less than $16,700 
At least $16,700 but less than $33,400 
$33,400 or more 
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 
$1,711 plus 8.5% of the excess over 
$33,400 
Sec. 6. 36 MRSA §5111, 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 I, 2007, for individuals 
filing married joint returns or surviving spouses permitted to file a joint 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 
$33,400 or more 
The tax is: 
1% of the Maine taxable income 
$84 plus 2.25% of the excess over $8,400 
$271 plus 3.5% of the excess over 
$16,700 
$855 plus 4.25% of the excess over 
$33,400 
Sec. 7. 36 MRSA §5200, sub-§l, as amended by PL 2005, c. 618, §6 and as 
affected by §22, is further amended to read: 
1. Imposition and rate of tax. A tax is imposed for each taxable year beginning 
before January 1, 2007 at the following rates on each taxable corporation and on each 
group of corporations that derives income from a unitary business carried on by 2 or more 
members of an affiliated group: 
If the income is: 
Not over $25,000 
$25,000 but not over $75,000 
$75,000 but not over $250,000 
$250,000 or more 
The tax is: 
3.5% of the income 
$875 plus 7.93% of the excess over 
$25,000 
$4,840 plus 8.33% of the excess 
over $75,000 
$19,418 plus 8.93% ofthe excess 
over $250,000 
In the case of an affiliated group of corporations engaged in a unitary business with 
activity taxable only by Maine, the rates provided in this subsection are applied only to 
the first $250,000 of the Maine net income of the entire group and must be apportioned 
equally among the taxable corporations unless those taxable corporations jointly elect a 
different apportionment. The balance of the Maine net income of the entire group is taxed 
at 8.93%. 
In the case of an affiliated group of corporations engaged in a unitary business with 
activity taxable both within and without this State, the rates provided in this subsection 
are applied only to the first $250,000 of the net income of the entire group and must be 
apportioned equally among the taxable corporations unless those taxable corporations 
jointly elect a different apportionment. The balance of the net income of the entire group 
is taxed at 8.93%. 
Sec. 8. 36 MRSA §5200-B is enacted to read: 
§5200-B. Imposition and rate of tax. 
II 
1. Imposition and rate of tax A tax is imposed for each taxable year beginning on 
or after January I, 2007 at the following rates on each taxable corporation and on each 
group of corporations that derives income from a unitary business carried on by 2 or more 
members of an affiliated group: 
. 
If the income is: 
Not over $25,000 
$25,000 but not over $75,000 
$75,000 but not over $250,000 
$250,000 or more 
The tax is: 
1.75% of the income 
$438 plus 3.965% of the excess over 
$25,000 
$2,420 plus 4.165% of the excess over 
$75,000 
$9,709 plus 4.465% of the excess over 
$250,000 
In the case of an affiliated group of corporations engaged in a unitary business with 
activity taxable only by Maine, the rates provided in this subsection are applied only to 
the first $250,000 of the Maine net income of the entire group and must be apportioned 
equally among the taxable corporations unless those taxable corporations jointly elect a 
different apportionment. The balance of the Maine net income of the entire group is taxed 
at 4.465%. 
In the case of an affiliated group of corporations engaged in a unitary business with 
activity taxable both within and without this State, the rates provided in this subsection 
are applied only to the first $250,000 of the net income of the entire group and must be 
apportioned equally among the taxable corporations unless those corporations jointly 
elect a different apportionment. The balance of the net income of the entire group is taxed 
at 4.465%. 
SUMMARY 
This bill reduces the individual and corporate income tax rates by 50% beginning in 
the 2007 tax year.