An Act To Update References to the United States Internal Revenue Code of 1986 Contained in the Maine Revised Statutes and Amend Income Tax Modifications and the Maine Capital Investment Tax Credit
Maine Legislature, Session 130, LD 0147
Committee: Taxation
Sponsors: TERRY
Amends: 36 MRSA §111, 36 MRSA §5122, 36 MRSA §5200-A, 36 MRSA §5219-N

Legislative Document
No. 147
H.P. 103
House of Representatives, January 21, 2021
An Act To Update References to the United States Internal Revenue 
Code of 1986 Contained in the Maine Revised Statutes and Amend 
Income Tax Modifications and the Maine Capital Investment Tax 
Credit
(EMERGENCY)
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204.
Received by the Clerk of the House on January 19, 2021.  Referred to the Committee on 
Taxation pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.
ROBERT B. HUNT
Clerk
Presented by Representative TERRY of Gorham.
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 2020; 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:
PART A
Sec. A-1.  36 MRSA §111, sub-§1-A, as amended by PL 2019, c. 616, Pt. X, §1, 
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, 2019 2020.
Sec. A-2.  Application. This Part applies to tax years beginning on or after January 
1, 2018 and to any prior tax year as specifically provided by the United States Internal 
Revenue Code of 1986 and amendments to that Code as of December 31, 2020.
PART B
Sec. B-1.  36 MRSA §5122, sub-§1, ¶MM is enacted to read:
MM.  For each taxable year beginning after December 31, 2017 and before January 1, 
2021, an amount equal to the taxpayer's excess business loss for the taxable year 
determined under the Code, Section 461(l), reduced by any amount of the loss included 
in Maine taxable income for a prior tax year pursuant to paragraph H.  Notwithstanding 
the application dates contained in the Code, Section 461(l)(1)(B), Section 461(l)(1)(B) 
applies to the calculation for the taxable year.
Sec. B-2.  36 MRSA §5122, sub-§2, ¶UU is enacted to read:
UU.  An amount equal to the value of any prior year addition modification under 
subsection 1, paragraph MM, but only to the extent that:
(1)  Maine taxable income is not reduced below zero;
(2)  The amount has not previously been used as a modification pursuant to this 
paragraph or otherwise used to reduce Maine taxable income; and
(3)  The taxpayer does not include the amount in computing any net operating loss 
carryback or carryover pursuant to the Code, Section 172 for federal income tax 
purposes.
PART C
Sec. C-1.  36 MRSA §5122, sub-§1, ¶NN is enacted to read:
NN.  For taxable years beginning on or after January 1, 2019 and before January 1, 
2021, the amount of the taxpayer's federal business interest deduction for the taxable 
year that exceeds the limitation for such deduction contained in the Code, Section 
163(j), applying a rate of 30% to adjusted taxable income for the purposes of the Code, 
Section 163(j)(1)(B) without regard to the special rule described in the Code, Section 
163(j)(10)(A)(i).
Sec. C-2.  36 MRSA §5122, sub-§2, ¶VV is enacted to read:
VV.  For taxable years beginning on or after January 1, 2021, an amount equal to the 
value of any prior year addition modification under subsection 1, paragraph NN, but 
only to the extent that:
(1)  Maine taxable income is not reduced below zero;
(2)  No more than 25% of the amount is used as a modification in any taxable year; 
and
(3)  The amount has not previously been used as a modification pursuant to this 
paragraph or otherwise used to reduce Maine taxable income.
Sec. C-3.  36 MRSA §5200-A, sub-§1, ¶GG is enacted to read:
GG.  For taxable years beginning on or after January 1, 2019 and before January 1, 
2021, the amount of the taxpayer's federal business interest deduction for the taxable 
year that exceeds the limitation for such deduction contained in the Code, Section 
163(j), applying a rate of 30% to adjusted taxable income for the purposes of the Code, 
Section 163(j)(1)(B) without regard to the special rule described in the Code, Section 
163(j)(10)(A)(i).
Sec. C-4.  36 MRSA §5200-A, sub-§2, ¶HH is enacted to read:
HH.  For taxable years beginning on or after January 1, 2021, an amount equal to the 
value of any prior year addition modification under subsection 1, paragraph GG, but 
only to the extent that:
(1)  Maine taxable income is not reduced below zero;
(2)  No more than 25% of the amount is used as a modification in any taxable year; 
and
(3)  The amount has not previously been used as a modification pursuant to this 
paragraph or otherwise used to reduce Maine taxable income.
PART D
Sec. D-1.  36 MRSA §5219-NN, sub-§2, ¶F, as repealed and replaced by PL 2017, 
c. 211, Pt. D, §8, is amended to read:
F.  Property owned by a person that provides multichannel, multipoint television 
distribution services; and
Sec. D-2.  36 MRSA §5219-NN, sub-§2, ¶G, as repealed and replaced by PL 2017, 
c. 211, Pt. D, §8, is amended to read:
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.; and
Sec. D-3.  36 MRSA §5219-NN, sub-§2, ¶H is enacted to read:
H.  Qualified improvement property, as defined in the Code, Section 168(e)(6), placed 
in service after December 31, 2017 and prior to January 1, 2020.
PART E
Sec. E-1.  36 MRSA §5200-A, sub-§1, ¶HH is enacted to read:
HH.  For taxable years beginning after January 1, 2019 and before January 1, 2020, an 
amount equal to the difference between the taxpayer's charitable deduction as 
determined under the Code, Section 170 excluding application of the amendments 
made by Section 2205 of the federal Coronavirus Aid, Relief, and Economic Security 
Act, Public Law 116-136, and the taxpayer's charitable deduction as determined under 
the Code, Section 170 including application of the amendments made by federal Public 
Law 116-136, Section 2205.
Sec. E-2.  36 MRSA §5200-A, sub-§2, ¶II is enacted to read:
II.  For taxable years beginning after January 1, 2020 and before January 1, 2025, an 
amount equal to the amount by which federal taxable income was increased under 
subsection 1, paragraph HH, but only to the extent that:
(1)  Maine taxable income is not reduced below zero; and
(2)  The amount has not previously been used as a modification pursuant to this 
paragraph or otherwise used to reduce Maine taxable income.
PART F
Sec. F-1.  36 MRSA §5122, sub-§1, ¶LL, as corrected by RR 2019, c. 1, Pt. A, 
§68, is repealed.
Sec. F-2.  36 MRSA §5122, sub-§2, ¶TT, as enacted by PL 2017, c. 474, Pt. C, §3 
and reallocated by RR 2019, c. 1, Pt. A, §69, is repealed.
Sec. F-3.  36 MRSA §5200-A, sub-§1, ¶DD, as corrected by RR 2019, c. 1, Pt. A, 
§72, is repealed.
Sec. F-4.  36 MRSA §5200-A, sub-§2, ¶GG, as enacted by PL 2017, c. 474, Pt. 
C, §7 and reallocated by RR 2019, c. 1, Pt. A, §73, is repealed.
Sec. F-5.  Retroactivity.  This Part applies retroactively to tax years beginning on 
or after January 1, 2018.
PART G
Sec. G-1.  36 MRSA §5200-A, sub-§1, ¶FF, as enacted by PL 2017, c. 474, Pt. D, 
§1, is amended to read:
FF.  An amount equal to the taxpayer's global intangible low-taxed income deduction 
claimed in accordance with the Code, Section 250(a)(1)(B).
Sec. G-2.  Retroactivity. This Part applies retroactively to tax years beginning on 
or after January 1, 2020.
Emergency clause.  In view of the emergency cited in the preamble, this legislation 
takes effect when approved.
SUMMARY
The bill does the following.
Part A 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, 2020, for tax years beginning 
on or after January 1, 2018 and for any prior tax year as specifically provided by the United 
States Internal Revenue Code of 1986, as amended.
Part B requires an addition modification for taxable income for income tax purposes 
for federal excess business losses allowed to noncorporate taxpayers pursuant to the 
Coronavirus Aid, Relief, and Economic Security Act, or "CARES Act," for taxable years 
beginning after December 31, 2017 and before January 1, 2021 and a subtraction 
modification for the carry-over of this amount in future years.
Part C requires an addition modification for taxable income for income tax purposes of 
the federal business interest deduction that exceeds 30% of adjusted taxable income 
pursuant to the CARES Act for taxable years beginning on or after January 1, 2019 and 
before January 1, 2021 and a subtraction modification for the carry-over of this amount in 
tax years beginning on or after January 1, 2021.
Part D excludes qualified improvement property placed in service after December 31, 
2017 and prior to January 1, 2020 from the Maine capital investment income tax credit.
Part E requires an addition modification for taxable income for income tax purposes 
for the additional charitable contribution deduction allowed to corporations pursuant to the 
CARES Act for taxable years beginning after January 1, 2019 and before January 1, 2020 
and a subtraction modification for the carry-over of this amount in future years.
Part F updates and simplifies Maine income tax law by conforming the Maine income 
tax with the federal net operating loss limitation, generally known as "the 80% taxable 
income limitation," and the CARES Act suspension of the limitation. This Part and Maine's 
conformity to the CARES Act net operating loss limitation suspension in Part A apply 
retroactively to tax years beginning on or after January 1, 2018.  Under Part F, the 80% 
taxable income limitation applies to tax years beginning after 2020.
Part G expands the addition modification for the amount of the global intangible low-
taxed income deduction.  For tax years beginning on or after January 1, 2020, the 
modification is for the total amount of the foreign-derived intangible income and global 
intangible low-taxed income deduction claimed in accordance with the Internal Revenue 
Code, Section 250(a).