An Act To Reduce Income Tax on Capital Gains
Maine Legislature, Session 124, LD 0618
Committee: Taxation
Sponsors: SMITH, TARDY, NASS, RA YE, CURTIS, DAVIS, FLETCHER, JOHNSON, KNIGHT, SA VIELLO
Amends: 36 MRSA §5200-A

Legislative Document 
No. 618 
S.P.233 
In Senate, February 17,2009 
An Act To Reduce Income Tax on Capital Gains 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Senator SMITH of Piscataquis. 
Cosponsored by Representative TARDY of Newport and 
9t[JtJ~ 
JOY J. O'BRIEN 
Secretary of the Senate 
Senators: NASS of York, RA YE of Washington, Representatives: CURTIS of Madison, 
DAVIS of Sangerville, FLETCHER of Winslow, JOHNSON of Greenville, KNIGHT of 
Livennore Falls, SA VIELLO of Wilton. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §S122, sub-§2, ~AA, as corrected by RR 2007, c. 2, §23, is 
amended to read: 
AA. For taxable years beginnjng ~nor after January 1,2009, an amount equal to the 
net decrease in the depreciationdeouctions allowable under sections 167 and 168 of 
the Code that would have been applicable to that property had the 50% bonus 
depreciation deduction under Section 103 of the Economic Stimulus Act of 2008, 
Public Law 110-185 not been claimed with respect to such property for which an 
addition was required under subsection 1, paragraph AA in a prior year. 
Upon the taxable disposition of property to which this paragraph applies, the amount 
of any gain or loss includable in federal adjusted gross income must be adjusted for 
Maine income tax purposes by an amount equal to the difference between the 
addition modification for such property under subsection 1, paragraph AA and the 
subtraction modifications allowed pursuant to this paragraph. 
The total amount of subtraction claimed for property under this paragraph for all tax 
years may not exceed the addition modification under subsection 1, paragraph AA for 
the same property; aH4 
Sec. 2. 36 MRSA §S122, sub-§2, IiflBB, as reallocated by RR 2007, c. 2, §24, is 
amended to read: 
BB. The amount of pension benefits to the extent included in federal adjusted gross 
income under a military retirement plan as defined in paragraph M that exceed the 
amount of military retirement pian pension benefits deducted under paragraph M and 
that are received by a person who practices as a licensed dentist in this State for an 
average of atJealit 20 hours per week during the tax year and who accepts patients 
who receive benefits uncler the MaineCare' program administered under Title 22, 
chapter 855.,.; and 
Sec. 3. 36 MRSA §S122, sub-§2, ~CC is enacted to read: 
Cc. One-half of the amount of net long-term capital gains. For pumoses of this 
. paragraph, "net long-term capital gains" means long-term capital gains less long-term 
'caphallosses.· 
Sec. 4. 36 MRSA §S200-A, sub-§2, ~, as amended by PL 2007, c. 700, Pt. B, 
§5, is further amended to read: 
R. For taxable years beginning on or after January 1, 2009, an amount equal to the 
net decrease in the depreciation deductions allowable under sections 167 and 16~ of 
3<; 
the Code that would have been applicable to"that property had the 50% bonus 
~ 6 
depreciation deduction under Section 103 of the Economic Stimulus Act of 2008, 
. Public Law 110-185 not been claimed with respect to such property for which an 
addition was required under subsection 1, paragraph T in a prior year. 
Upon the taxable disposition of property to which this paragraph applies, the amount 
of any gain or loss includable in federal adjusted gross income must be adjusted for 
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Maine income tax purposes by an amount equal to the differenCe between the 
addition modification for such property under subsection 1, paragraph T and the 
subtraction modifications alIowed pursuant to this paragraph. 
The total amount of subtraction claimed for property under this paragraph for alI tax 
years may not exceed the addition modification under subsection 1, paragraph T for 
the same property; aHti· 
Sec. 5. 36 MRSA §5200-A, sub-§2, ~S, as enacted by PL 2007, c. 700, Pt. B, §6, 
is amended to read: 
S. 
An amount equal to the value of any prior year addition modification under 
subsection 1, paragraph D, but only to the extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxabie year is within the alIowable federal period for carryover of the 
net operating loss plus one year; and 
(3) The amount has not been previously used as a modification pursuant to this 
subsection7; and 
Sec. 6. 36 MRS A §5200-A, sub-§2, CUT is enacted to read: 
T. 
One-half of the amount of net long-term capital gains. For purposes of this 
paragraph, "net long-term capital gains" means long-term capital gains less long-term 
capital losses. 
Sec. 7. Application. This Act applies to tax years beginning on or after January 1, 
2009. 
SUMMARY 
This bilI excludes from both the individual and corporate income tax 112 of net long-
term capital gains.