An Act To Provide Tax Fairness to Maine's Middle Class and Working Families
Maine Legislature, Session 126, LD 1113
Committee: Taxation
Sponsors: BERRY, ALFOND, BROOKS, EVES, GOODE, CRAVEN, HASKELL, PATRICK, VALENTINO

Legislative Document 
No. 1113 
H.P. 785 
House of Representatives, March 21, 2013 
An Act To Provide Tax Fairness to Maine's Middle Class and 
Working Families 
Reference to the Committee on Taxation suggested and ordered printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative BERRY of Bowdoinham. 
Cosponsored by President ALFOND of Cumberland and 
Representatives: BROOKS of Winterport, Speaker EVES of North Berwick, GOODE of 
Bangor, McCABE of Skowhegan, Senators: CRAVEN of Androscoggin, HASKELL of 
Cumberland, PATRICK of Oxford, VALENTINO of York. 
Be it enacted by the People of the State of Maine as follows: 
CONCEPT DRAFT 
SUMMARY 
This bill is a concept draft pursuant to Joint Rule 208. 
This bill proposes emergency legislation to accomplish the following goals: 
(1)  To equalize the total state and local effective tax rate paid by low-income, 
middle-income and high-income Maine tax filers; 
(2)  To partially fund the income and estate tax reductions of Public Law 2011, 
chapter 380 by providing revenue of between $150,000,000 and $250,000,000 over the 
next 2 years; and 
(3)  To maintain an equalized state and local tax rate while enabling future changes 
that may also simplify Maine's tax code, stabilize revenues and reduce the tax burden on 
Maine residents. 
To accomplish these goals, the bill proposes to establish a tax equalization 
assessment on those income tax filers who have an annual income equal to or exceeding 
$250,000, but whose total effective state and local tax rate is lower than the average 
effective state and local tax rate for all other Maine households.  The tax equalization 
assessment must bring the total effective state and local tax rate of these tax filers to the 
average rate paid by all other Maine households, as determined by the Department of 
Administrative and Financial Services, Bureau of Revenue Services.  The tax 
equalization assessment must be structured for both administrative simplicity and tax 
parity and must apply to tax years beginning on or after January 1, 2013. 
The bill also proposes to establish a tax equalization credit for those income tax filers 
who have an annual income below $125,000, but who pay a total effective state and local 
tax rate that is significantly higher than the average effective state and local tax rate for 
all other Maine households.  The tax equalization credit may be structured as an 
expansion of an existing credit or refund or may replace and enhance such credits or 
refunds.  The tax equalization credit must be funded entirely by the tax equalization 
assessment and must bring the total effective state and local tax rate of these tax filers as 
nearly as possible to the average rate paid by all other Maine households, as determined 
by the Department of Administrative and Financial Services, Bureau of Revenue 
Services.  The tax equalization credit must be structured for both administrative 
simplicity and tax parity and must be made effective beginning January 1, 2016. 
For the purposes of calculating the tax equalization assessment and credit, the rate 
impact of the tax equalization assessment and credit from the previous year must be 
excluded from the determination of the average effective state and local tax rate paid by 
all Maine households. 
In addition, the bill proposes that the State Tax Assessor be required to report to the 
joint standing committee of the Legislature having jurisdiction over appropriations and 
financial affairs and the joint standing committee of the Legislature having jurisdiction 
over taxation matters each year with respect to the total effective state and local tax rate 
for Maine residents, nonresidents and businesses, as well as the aggregate rate impact of 
the tax equalization assessment and credit.  Upon receiving this report, the joint standing 
committee of the Legislature having jurisdiction over taxation matters is authorized to 
report out legislation to simplify and to further equalize the tax code, as well as 
legislation to repeal or modify the tax equalization assessment and credit once it 
determines the overall state and local tax burden to be fair and proportionate for all.