An Act To Improve Corporate Tax Fairness by Amending the Rates Imposed on Corporate Income
Maine Legislature, Session 129, LD 0903
Committee: Taxation
Sponsors: CUDDY, CHIPMAN, BABINE, SYLVESTER, TIPPING, JACKSON
Amends: 36 MRSA §5200

Legislative Document
No. 903
H.P. 667
House of Representatives, February 19, 2019
An Act To Improve Corporate Tax Fairness by Amending the Rates 
Imposed on Corporate Income
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative CUDDY of Winterport.
Cosponsored by Senator CHIPMAN of Cumberland and
Representatives: BABINE of Scarborough, SYLVESTER of Portland, TIPPING of Orono, 
Senator: President JACKSON of Aroostook.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5200, sub-§1-A, as enacted by PL 2017, c. 474, Pt. E, §2, is 
amended to read:
1-A.  Imposition and rate of tax beginning 2018 and 2019.  For tax years 
beginning on or after January 1, 2018 in 2018 and 2019, a tax is imposed for each taxable 
year 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:
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 $3,500,000 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 $3,500,000 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. 2.  36 MRSA §5200, sub-§1-B is enacted to read:
1-B.  Imposition and rate of tax beginning 2020.  For tax years beginning on or 
after January 1, 2020, a tax is imposed for each taxable year 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:
The tax is: 
Not over $350,000
3.5% of the income
$350,000 but not over $1,050,000
$12,250 plus 7.93% of the excess over 
$350,000
$1,050,000 but not over $3,500,000
$67,760 plus 8.33% of the excess over 
$1,050,000
$3,500,000 or more
$271,845 plus 8.93% of the excess over 
$3,500,000
If the income is:
The tax is: 
Not over $350,000
3.5% of the income
$350,000 but not over $1,050,000
$12,250 plus 7.93% of the excess over 
$350,000
$1,050,000 but not over $2,000,000
$67,760 plus 8.33% of the excess over 
$1,050,000
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 $3,500,000 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 9%.
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 $3,500,000 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 9%.
Sec. 3.  36 MRSA §5200, sub-§§2 to 4, as amended by PL 2017, c. 474, Pt. E, 
§3, are further amended to read:
2.  Business activity only within Maine.  For purposes of subsections 1 and, 1-A 
and 1-B, with respect to a taxable corporation or group of corporations that derive income 
from a unitary business carried on by 2 or more members of an affiliated group with 
income from business activity that is taxable only by Maine, "income" means Maine net 
income.
3.  Business activity within and outside Maine.  For purposes of subsections 1 and, 
1-A and 1-B, with respect to a taxable corporation with income from business activity 
that is taxable both within and without this State, "income" means the corporation's net 
income.  The tax amount computed under subsections 1 and, 1-A and 1-B must then be 
apportioned under the provisions of chapter 821 to determine the amount of tax imposed 
on that corporation.
4.  Business activity within and outside Maine; unitary business.  For purposes of 
subsections 1 and, 1-A and 1-B, with respect to taxable corporations that derive income 
from a unitary business carried on by 2 or more members of an affiliated group with 
business activity that is taxable both within and without this State, "income" means the 
net income of the entire group.  The tax amount computed under subsections 1 and, 1-A 
and 1-B must then be apportioned under the provisions of chapter 821 for the entire group 
to determine the amount of tax imposed on the taxable corporations.
$2,000,000 but not over $3,000,000
$146,895 plus 8.5% of the excess over 
$2,000,000
$3,000,000 but not over $3,500,000
$231,895 plus 8.75% of the excess over 
$3,000,000
$3,500,000 or more
$275,645 plus 9% of the excess over 
$3,500,000
SUMMARY
This bill establishes 2 new tax brackets and 3 new rates for corporate income tax 
purposes for tax years beginning on or after January 1, 2020.  Under the bill, corporate 
income between $2,000,000 and $3,000,000 is taxed at the rate of 8.5% and corporate 
income between $3,000,000 and $3,500,000 is taxed at the rate of 8.75%; such income is 
taxed under current law at the rate of 8.33%.  The top tax rate, which is imposed on 
corporate income over $3,500,000, is increased from 8.93% to 9%.