An Act To Update References to the United States Internal Revenue Code of 1986 Contained in the Maine Revised Statutes, Decouple Federal Bonus Depreciation Deductions and Create a Maine Capital Investment Credit
Maine Legislature, Session 127, LD 0138
Committee: Appropriations and Financial Affairs
Sponsors: ROTUNDO, HAMPER
Amends: 36 MRSA §111, 36 MRSA §5122, 36 MRSA §5200-A, 36 MRSA §5219-M

Legislative Document 
No. 138 
H.P. 96 
House of Representatives, January 22, 2015 
An Act To Update References to the United States Internal Revenue 
Code of 1986 Contained in the Maine Revised Statutes, Decouple 
Federal Bonus Depreciation Deductions and Create a Maine Capital 
Investment Credit 
(EMERGENCY) 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
ROBERT B. HUNT 
Clerk 
Presented by Representative ROTUNDO of Lewiston.  (GOVERNOR'S BILL) 
Cosponsored by Senator HAMPER of Oxford. 
Emergency preamble. Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and 
Whereas, state tax law needs to be updated to conform to federal law before the 90-
day period expires to avoid delay in the processing of income tax returns for 2014; and 
Whereas, legislative action is immediately necessary to ensure continued and 
efficient administration of the state income tax and certain other state taxes; and 
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §111, sub-§1-A, as amended by PL 2013, c. 472, §1 and 
affected by §2, is further amended to read: 
1-A.  Code.  "Code" means the United States Internal Revenue Code of 1986 and 
amendments to that Code as of December 31, 2013 2014. 
Sec. 2.  36 MRSA §5122, sub-§1, ¶GG, as amended by PL 2013, c. 368, Pt. TT, 
§3, is further amended to read: 
GG.  The amount claimed as a deduction in determining federal adjusted gross 
income that is used to calculate the credit for Maine fishery infrastructure investment 
under section 5216-D; and 
Sec. 3.  36 MRSA §5122, sub-§1, ¶HH, as corrected by RR 2013, c. 1, §52, is 
amended to read: 
HH.  For taxable years beginning in 2013: 
(1)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property placed in service in the State during the taxable year for 
which a credit is claimed under section 5219-JJ for that taxable year; and 
(2)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property for which a credit is not claimed under section 5219-JJ.; 
and 
Sec. 4.  36 MRSA §5122, sub-§1, ¶II is enacted to read: 
II.  For taxable years beginning in 2014: 
(1)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property placed in service in the State during the taxable year for 
which a credit is claimed under section 5219-MM for that taxable year; and 
(2)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property for which a credit is not claimed under section 
5219-MM. 
Sec. 5.  36 MRSA §5122, sub-§2, ¶LL, as repealed and replaced by PL 2013, c. 
588, Pt. A, §46 and affected by §47, is amended to read: 
LL.  To the extent included in federal adjusted gross income and to the extent 
otherwise subject to Maine income tax, an amount equal to military compensation 
earned during the taxable year for service performed outside of this State pursuant to 
written military orders: 
(1)  For active duty service in the active components of the United States Army, 
Navy, Air Force, Marines or Coast Guard by a service member whose permanent 
duty station during such service is located outside of this State; and 
(2)  For active duty service in the active or reserve components of the United 
States Army, Navy, Air Force, Marines or Coast Guard or in the Maine National 
Guard by a service member in support of a federal operational mission or a 
declared state or federal disaster response when the orders are either at federal 
direction or at the direction of the Governor of this State; and 
Sec. 6.  36 MRSA §5122, sub-§2, ¶MM, as enacted by PL 2013, c. 368, Pt. TT, 
§8, is amended to read: 
MM.  For taxable years beginning on or after January 1, 2014, an amount equal to the 
net increase in the depreciation deduction allowable under the Code, Sections 167 
and 168 that would have been applicable to that property had the depreciation 
deduction under the Code, Section 168(k) not been claimed with respect to such 
property placed in service during the taxable year beginning in 2013 for which an 
addition was required under subsection 1, paragraph HH, subparagraph (2) for the 
taxable year beginning in 2013. 
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 HH, 
subparagraph (2) and the subtraction modifications allowed pursuant to this 
paragraph. 
The total amount of subtraction claimed under this paragraph for all tax years may 
not exceed the addition modification under subsection 1, paragraph HH, 
subparagraph (2) for the same property.; and 
Sec. 7.  36 MRSA §5122, sub-§2, ¶NN is enacted to read: 
NN.  For taxable years beginning on or after January 1, 2015, an amount equal to the 
net increase in the depreciation deduction allowable under the Code, Sections 167 
and 168 that would have been applicable to that property had the depreciation 
deduction under the Code, Section 168(k) not been claimed with respect to such 
property placed in service during the taxable year beginning in 2014 for which an 
addition was required under subsection 1, paragraph II, subparagraph (2) for the 
taxable year beginning in 2014. 
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 II, 
subparagraph (2) and the subtraction modifications allowed pursuant to this 
paragraph. 
The total amount of subtraction claimed under this paragraph for all tax years may 
not exceed the addition modification under subsection 1, paragraph II, subparagraph 
(2) for the same property. 
Sec. 8.  36 MRSA §5200-A, sub-§1, ¶Z, as amended by PL 2013, c. 368, Pt. TT, 
§13, is further amended to read: 
Z.  The amount claimed as a deduction in determining federal taxable income that is 
used to calculate the credit for Maine fishery infrastructure investment under section 
5216-D; and 
Sec. 9.  36 MRSA §5200-A, sub-§1, ¶AA, as corrected by RR 2013, c. 1, §53, is 
amended to read: 
AA.  For taxable years beginning in 2013: 
(1)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property placed in service in the State during the taxable year for 
which a credit is claimed under section 5219-JJ for that taxable year; and 
(2)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property for which a credit is not claimed under section 5219-JJ.; 
and 
Sec. 10.  36 MRSA §5200-A, sub-§1, ¶BB is enacted to read: 
BB.  For taxable years beginning in 2014: 
(1)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property placed in service in the State during the taxable year for 
which a credit is claimed under section 5219-MM for that taxable year; and 
(2)  An amount equal to the net increase in depreciation attributable to the 
depreciation deduction claimed by the taxpayer under the Code, Section 168(k) 
with respect to property for which a credit is not claimed under section 
5219-MM. 
Sec. 11.  36 MRSA §5200-A, sub-§2, ¶X, as amended by PL 2013, c. 368, Pt. 
TT, §16, is further amended to read: 
X.  To the extent included in federal taxable income, an amount equal to the 
refundable portion of the income tax credit under the Maine New Markets Capital 
Investment Program under Title 10, section 1100-Z; and 
Sec. 12.  36 MRSA §5200-A, sub-§2, ¶Y, as enacted by PL 2013, c. 368, Pt. TT, 
§17, is amended to read: 
Y.  For taxable years beginning on or after January 1, 2014, an amount equal to the 
net increase in the depreciation deduction allowable under the Code, Sections 167 
and 168 that would have been applicable to that property had the depreciation 
deduction under the Code, Section 168(k) not been claimed with respect to such 
property placed in service during the taxable year beginning in 2013 for which an 
addition was required under subsection 1, paragraph AA, subparagraph (2) for the 
taxable year beginning in 2013. 
Upon the taxable disposition of property to which this paragraph applies, the amount 
of any gain or loss includable in federal taxable 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, subparagraph (2) 
and the subtraction modifications allowed pursuant to this paragraph. 
The total amount of subtraction claimed under this paragraph for all tax years may 
not exceed the addition modification under subsection 1, paragraph AA, 
subparagraph (2) for the same property.; and 
Sec. 13.  36 MRSA §5200-A, sub-§2, ¶Z is enacted to read: 
Z.  For taxable years beginning on or after January 1, 2015, an amount equal to the 
net increase in the depreciation deduction allowable under the Code, Sections 167 
and 168 that would have been applicable to that property had the depreciation 
deduction under the Code, Section 168(k) not been claimed with respect to such 
property placed in service during the taxable year beginning in 2014 for which an 
addition was required under subsection 1, paragraph BB, subparagraph (2) for the 
taxable year beginning in 2014. 
Upon the taxable disposition of property to which this paragraph applies, the amount 
of any gain or loss includable in federal taxable 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 BB, subparagraph (2) 
and the subtraction modifications allowed pursuant to this paragraph. 
The total amount of subtraction claimed under this paragraph for all tax years may 
not exceed the addition modification under subsection 1, paragraph BB, subparagraph 
(2) for the same property. 
Sec. 14.  36 MRSA §5219-MM is enacted to read: 
§5219-MM.  Maine capital investment credit for 2014 
1.  Credit allowed.  A taxpayer that claims a depreciation deduction under the Code, 
Section 168(k) for property placed in service in the State during the taxable year 
beginning in 2014 is allowed a credit against the taxes imposed by this Part in an amount 
equal to 9% of the amount of the net increase in the depreciation deduction reported as an 
addition to income for the taxable year under section 5122, subsection 1, paragraph II, 
subparagraph (1) or section 5200-A, subsection 1, paragraph BB, subparagraph (1) with 
respect to that property, except for excluded property under subsection 2. 
2.  Certain property excluded.  The following property is not eligible for the credit 
under this section: 
A.  Property owned by a public utility as defined in Title 35-A, section 102, 
subsection 13; 
B.  Property owned by a person that provides radio paging services as defined in Title 
35-A, section 102, subsection 15; 
C.  Property owned by a person that provides mobile telecommunications services as 
defined in Title 35-A, section 102, subsection 9-A; 
D.  Property owned by a cable television company as defined in Title 30-A, section 
2001, subsection 2; 
E.  Property owned by a person that provides satellite-based direct television 
broadcast services; 
F.  Property owned by a person that provides multichannel, multipoint television 
distribution services; and 
G.  Property that is not in service in the State for the entire 12-month period 
following the date it is placed in service in the State. 
3.  Limitations; carry-forward.  The credit allowed under subsection 1 may not 
reduce the tax otherwise due under this Part to less than zero.  Any unused portion of the 
credit may be carried forward to the following year or years for a period not to exceed 20 
years. 
4.  Recapture.  The credit allowed under this section must be fully recaptured to the 
extent claimed by the taxpayer if the property forming the basis of the credit is not used 
in the State for the entire 12-month period following the date it is placed in service in the 
State. The credit must be recaptured by filing an amended return in accordance with 
section 5227-A for the tax year in which that property was used to calculate the credit 
under this section.  The amended return must reflect the credit disallowed and the income 
modifications required by section 5122, subsection 1, paragraph II and section 5200-A, 
subsection 1, paragraph BB with respect to that property. 
Sec. 15.  Application.  That section of this Act that amends the Maine Revised 
Statutes, Title 36, section 111, subsection 1-A applies to tax years beginning on or after 
January 1, 2014 and to any prior tax years as specifically provided by the United States 
Internal Revenue Code of 1986 and amendments to that Code as of December 31, 2014. 
Emergency clause.  In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill updates references to the United States Internal Revenue Code of 1986 
contained in the Maine Revised Statutes, Title 36 to refer to the United States Internal 
Revenue Code of 1986, as amended through December 31, 2014, for tax years beginning 
on or after January 1, 2014 and for any prior tax years as specifically provided by the 
United States Internal Revenue Code of 1986, as amended.  This bill primarily affects the 
State's income tax laws. 
This bill also decouples Maine individual and corporate income taxes from federal 
bonus depreciation deductions.  In addition, it provides a Maine capital investment credit 
for taxable years beginning in 2014 with respect to depreciable property placed in service 
in the State.  The credit is equal to 9% of the amount of the net increase in depreciation 
attributable to the depreciation deduction claimed by the taxpayer under the United States 
Internal Revenue Code of 1986, Section 168(k) with respect to property placed in service 
in the State during the taxable year.