An Act To Prevent Tax Haven Abuse
Maine Legislature, Session 129, LD 0403
Committee: Taxation
Sponsors: TIPPING, JACKSON, CUDDY, GATTINE, MOONEN, PIERCE, TEPLER, BREEN, LIBBY
Amends: 36 MRSA §5200

Legislative Document
No. 403
H.P. 312
House of Representatives, January 29, 2019
An Act To Prevent Tax Haven Abuse
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative TIPPING of Orono.
Cosponsored by President JACKSON of Aroostook and
Representatives: CUDDY of Winterport, GATTINE of Westbrook, MOONEN of Portland, 
PIERCE of Falmouth, TEPLER of Topsham, Senators: BREEN of Cumberland, LIBBY of 
Androscoggin.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5200, sub-§5, as enacted by PL 2005, c. 457, Pt. FFF, §1 and 
affected by §2, is repealed and the following enacted in its place:
5.  Net income.  For purposes of this section, "net income" means for any taxable 
year the total of the following as modified by section 5200-A:
A.  The taxable income of the taxpayer for that taxable year under the laws of the 
United States; and
B.  The taxable income or loss of any corporation that is a member of a unitary group 
and that is incorporated in any of the following jurisdictions:  the Principality of 
Andorra, Anguilla, Antigua and Barbuda, Aruba, the Commonwealth of the 
Bahamas, the Kingdom of Bahrain, Barbados, Belize, Bermuda, the British Virgin 
Islands, the Cayman Islands, the Cook Islands, the Republic of Cyprus, the 
Commonwealth of Dominica, Gibraltar, Grenada, the Bailiwick of Guernsey, the Isle 
of Man, the Bailiwick of Jersey, the Republic of Liberia, the Principality of 
Liechtenstein, the Grand Duchy of Luxembourg, the Republic of Malta, the Republic 
of the Marshall Islands, the Republic of Mauritius, the Principality of Monaco, 
Montserrat, the Republic of Nauru, the Caribbean Netherlands, Niue, the Independent 
State of Samoa, the Republic of San Marino, the Republic of Seychelles, the 
Federation of St. Christopher and Nevis, St. Lucia, St. Vincent and the Grenadines, 
the Turks and Caicos Islands, the United States Virgin Islands and the Republic of 
Vanuatu.
The State Tax Assessor shall review annually the list of jurisdictions in paragraph B and 
report to the joint standing committee of the Legislature having jurisdiction over taxation 
matters whether any jurisdictions should be added to or deleted from the list based on 
whether the jurisdiction taxes no or only nominal income, the jurisdiction lacks effective 
exchange of information with other taxing authorities, the jurisdiction lacks governmental 
transparency and the jurisdiction protects business with no substantial activity.
Sec. 2.  Rules.  The State Tax Assessor shall adopt rules to determine the income or 
loss for a corporation that is a member of a unitary group that is not otherwise required to 
file a consolidated federal return and to prevent double taxation or double deduction of 
any amount included in the computation of net income under the Maine Revised Statutes, 
Title 36, section 5200, subsection 5.  Rules adopted pursuant to this section are major 
substantive rules as described in Title 5, chapter 375, subchapter 2-A.
Sec. 3.  Application.  This Act applies to tax years beginning on or after January 1, 
2020.
SUMMARY
This bill requires corporations that file unitary income tax returns in Maine to include 
income from certain jurisdictions outside the United States in net income when 
apportioning income among tax jurisdictions.  The State Tax Assessor is required to 
adopt major substantive rules to determine the income or loss attributable to such 
corporations and to prevent double taxation or deduction of income.  The assessor is 
required to submit an annual report to the joint standing committee of the Legislature 
having jurisdiction over taxation matters regarding whether jurisdictions should be added 
to or deleted from the list of tax havens based on specified criteria.