An Act To
Maine Legislature, Session 129, LD 1671
Committee Amendment CA_A_H623 (House)
Amends: 36 MRSA §5122, 36 MRSA §5200-A, 36 MRSA §5219-N, 26 MRSA §42-C, 36 MRSA §5219-S

COMMITTEE AMENDMENT "A" to H.P. 1198, L.D. 1671, Bill, "An Act To 
Amend the Laws Governing the Maine Capital Investment Credit To Ensure Fairness for 
Maine Businesses" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Amend the Laws Governing the Maine Capital Investment Credit To 
Ensure Fairness for Maine Businesses and To Reduce Taxes on Lower-income 
Working Families' 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'PART A 
Sec. A-1. 36 MRSA §5122, sub-§2, ,roo, as enacted by PL 2015, c. 388, Pt. A, 
§8, is amended to read: 
00. For taxable years beginning on or after January 1, 2016 and before January 1. 
2020, 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 for 
which an addition was required under subsection 1, paragraph KK, subparagraph (2) 
for the taxable 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 KK, 
subparagraph (2) and the subtraction modifications allowed pursuant to this 
paragraph. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 1198, L.D. 1671 
The total amount of subtraction claimed under this paragraph for all tax years may 
not exceed the addition modification under subsection 1, paragraph KK, 
subparagraph (2) for the same property. 
Sec. A-2. 36 MRSA §5122, sub-§2, 1QQ is enacted to read: 
00. For taxable years beginning on or after January 1. 2020. 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 on or after January 1. 
2020 for which an addition was required under subsection 1. paragraph KK for the 
taxable 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 KK 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 KK for the same 
property. 
Sec. A-3. 36 MRSA §5200-A, sub-§2, 1AA, as enacted by PL 2015, c. 388, Pt. 
A, §14, is amended to read: 
AA. For taxable years beginning on or after January 1, 2016 and before January 1. 
2020, 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 for 
which an addition was required under subsection 1, paragraph CC, subparagraph (2) 
for the taxable year. 
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 CC, 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 CC, subparagraph 
(2) for the same property. 
Sec. A-4. 36 MRSA §5200-A, sub-§2, 1FF is enacted to read: 
FF. For taxable years beginning on or after January 1. 2020. 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 l 68(k) not been claimed with respect to such 
property placed in service during the taxable year beginning on or after January 1. 
COMMITTEE AMENDMENT 
COMMJ..TTEE AMEND'MENT ·A "to H.P. 1198, L.D. 1671 
2020 for which an addition was required under subsection 1. paragraph CC for the 
taxable year. 
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 CC 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 CC for the same 
property. 
Sec. A-5. 36 MRSA §5219-NN, sub-§1, as repealed and replaced by PL 2017, c. 
211, Pt. D, §8, is amended to read: 
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 a taxable year that begins 
on or after January 1, 2015 and before January 1. 2020 is allowed a credit as follows: 
A. A taxable corporation 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 
5200-A, subsection 1, paragraph CC, subparagraph (1) with respect to that property, 
except for excluded property under subsection 2; or 
B. An individual is allowed a credit against the taxes imposed by this Part in an 
amount equal to: 
(1) For taxable years beginning in 2015, 8% 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 KK, subparagraph (1) with respect to 
that property, except for excluded property under subsection 2; and 
(2) For taxable years beginning on or after January 1, 2016, 7% 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 KK, 
subparagraph (1) with respect to that property, except for excluded property 
under subsection 2. 
Sec. A-6. 36 MRSA §5219-NN, sub-§1-A is enacted to read: 
1-A. Credit allowed; on or after January 1, 2020. A taxpayer that claims a 
depreciation deduction under the Code, Section l 68{k) for property placed in service in 
the State during a taxable year that begins on or after January 1. 2020 is allowed a credit 
as follows: 
A. For a taxable corporation. a credit against the taxes imposed by this Part in an 
amount equal to 1.2% of the amount of the net increase in the depreciation deduction 
reported as an addition to income for the taxable year under section 5200-A. 
subsection 1. paragraph CC, subparagraph (1) with respect to that property, except for 
excluded property under subsection 2; and 
COMMITTEE AMENDMENT 
}{ 
ii~ 
COMMITTEEAMENDMENTft "toH.P.1198,L.D.1671 
B. For an individual, a credit against the taxes imposed by this Part in an amount 
equal to 1.2% of the net increase in the depreciation deduction reported as an addition 
to income for the taxable year under section 5122. subsection 1. paragraph KK.. 
subparagraph (1) with respect to that property. except for excluded property under 
subsection 2. 
Sec. A-7. 36 MRSA §5219-NN, sub-§3, as repealed and replaced by PL 2017, c. 
211, Pt. D, §8, is amended to read: 
3. Limitations; carry-forward. The credit allowed under subseetion subsections 1 
and 1-A 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. 
PARTB 
Sec. B-1. 26 MRSA §42-C is enacted to read: 
§42-C. Notification regarding earned income tax credit eligibility 
1. Bureau to provide poster or notice. The bureau shall produce and furnish to 
employers posters or notices in printed form that state that an employee may be eligible 
for federal and state earned income tax credits and that the employee may apply for the 
tax credits on the employee's income tax returns. 
2. Employer to post notice. An employer shall post and keep posted in a place 
accessible to the employer's employees a copy of the printed poster or notice furnished by 
the bureau pursuant to subsection 1. An employer who violates this subsection is subject 
to the same penalties as set forth in section 42-B. subsection 3. 
Sec. B-2. 36 MRSA §5219-S, as amended by PL 2015, c. 328, §8, is further 
amended to read: 
§5219-S. Earned income credit 
1. Resident taxpayer. A resident individual who is an eligible individual is allowed 
a credit against the tax otherwise due under this Part in the amount of g4, 25% of the 
federal earned income credit for the same taxable year for a resident eligible individual 
who does not have a qualifying child and 12% of the federal earned income credit for the 
same taxable year, exsept that for tax years beginning in 2009 and 2010. the awlisable 
nsrsel'lta110 ii. 4% for all other resident eligible individuals. 
2. Nonresident taxpayer. A nonresident individual who is an eligible individual is 
allowed a credit against the tax otherwise due under this Part in the amount of g4, 25% of 
the federal earned income credit for the same taxable year for a nonresident eligible 
individual who does not have a qualifying child and 12% of the federal earned income 
credit for the same taxable year, e:Ksept that fur ta1c years beginning in 2009 and 2010, the 
applieable pernentage is 4 % for all other nonresident eligible individuals, multiplied by 
the ratio of the individual's Maine adjusted gross income, as defined in section 5102, 
subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as 
modified by section 5122. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 1198, L.D. 1671 
lt (1 r' :--; 
3. Part-year resident taxpayer. An eligible individual who files a return as a part-
year resident in accordance with section 5224-A is allowed a credit against the tax 
otherwise due under this Part in the amount of ~ 
25% of the federal earned income 
credit for the same taxable year for an eligible part-year individual who does not have a 
qualifying child and 12% of the federal earned income credit for the same taxable year; 
eKcept that for taJE years beginru.ng iti 2009 aH:d 2010, the applicable perceH:tage is 4% for 
all other eligible part-year individuals, multiplied by a ratio, the numerator of which is the 
individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, 
paragraph A for that portion of the taxable year during which the individual was a 
resident plus the individual's Maine adjusted gross income as defined in section 5102, 
subsection 1-C, paragraph B for that portion of the taxable year during which the 
individual was a nonresident and the denominator of which is the individual's entire 
federal adjusted gross income, as modified by section 5122. 
4. Limitation. The credit allowed by this section may not reduce the Maine income 
tax to less than zero, except that for tax years beginning on or after January 1, 2016, the 
credit allowed under subsections 1 and 3 is refundable. 
5. Eligible individual under 25 years of age and without a qualifying child. The 
credit for an eligible individual who is entitled to a credit under subsections 1 to 3. has 
not attained 25 years of age and does not have a qualifying child for the taxable year must 
be calculated in the same manner as it would be calculated if that individual were eligible 
for a federal earned income credit. 
6. Eligible individual defined. For tax years beginning on or after Januaiy 1. 2020, 
for the purposes of this section. unless the context otherwise indicates, "eligible 
individual" has the same meaning as under Section 32{c)(l) of the Code except that 
"eligible individual" also includes an individual who does not have a qualifying child for 
the taxable year. who is at least 18 years of age and has not attained 25 years of age 
before the close of the taxable year and who also meets the qualifications under Section 
32(c)(l)(A)(ii)(I) and (III) of the Code. 
Sec. B-3. Application. This Part applies to tax years beginning on or after 
January 1, 2020. 
Sec. B-4. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services, Bureau of 0002 
Initiative: Provides funding for one Senior Tax Examiner position and related costs to 
review, process and audit income tax returns to verify eligibility for the earned income 
7 
tax credit. 
GENERAL FUND 
POSITIONS - LEGISLATIVE COUNT 
Personal Services 
All Other 
2019-20 
1.000 
$76,351 
$32,858 
COMMITTEE AMENDMENT 
2020-21 
1.000 
$102,817 
$4,778 
COMMITTEE AMENDMENT "A" to H.P. 1198, L.D. 1671 
GENERAL FUND TOTAL 
$109,209 
$107,595 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment replaces the concept draft with the following changes to the income 
tax laws for tax years beginning on or after January 1, 2020. 
Part A makes changes to the Maine capital investment credit and related subtraction 
modification provisions to provide greater fairness in the treatment of Maine businesses 
compared to out-of-state businesses. 
Part B expands the earned income tax credit to individuals who are 18 to 24 years of 
age and have no qualifying children, increases the credit from 5% to 25% of the federal 
earned income tax credit for individuals with no qualifying children and 12% of the 
federal earned income tax credit for all other eligible individuals and requires employers 
to post a notice provided by the Department of Labor, Bureau of Labor Standards 
regarding the availability of the earned income credit. 
The amendment also adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached} 
COMMITTEE AMENDMENT 
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Approved: 06/10/19 ;b/ae 
LD 1671 
LR642(02) 
An Act To Amend the Laws Governing the Maine Capital Investment Credit To Ensure Fairness for 
Maine Businesses 
i 
Fiscal Note for Bill as Amended by Committee Amendment ~· ( /1-fo ~} J 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Appropriations/ Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY2019-20 
($1,942,791) 
$109,209 
$2,052,000 
$108,000 
FY2020-21 
($3,944,155) 
$107,595 
$4,051,750 
$213,250 
Projections 
FY2021-22 
($563,821) 
$110,679 
$674,500 
$35,500 
Projections 
FY2022-23 
$3,296,356 
$113,856 
($3,182,500) 
($167,500) 
The bill makes changes to the Maine Capital Investment Credit, increases the earned income tax credit rate and 
expands eligibility for the earned income tax credit and would result in an increase in General Fund revenue of 
$2,052,000 in fiscal year 2019-20 and $4,051,750 in fiscal year 2020-21. It would also increase Local Government 
Fund revenue by $108,000 in fiscal year 2019-20 and $213,250 in fiscal year 2020-21. The bill includes a General 
Fund appropriation of $109,209 in fiscal year 2019-20 and $107,595 in fiscal year 2020-21 for one Senior Tax 
Examiner position and related costs to review, process and audit income tax returns to verify eligibility for the earned 
income tax credit. 
Additional costs to the Department of Labor to issue the required posters or notices can be absorbed within existing 
budgeted resources. 
LR0642(02) - Fiscal Note - Page 1 of 1