An Act to Phase Out the Income Tax
Maine Legislature, Session 131, LD 0835
Committee: Taxation
Sponsors: BOYER, BRAKEY, ANDREWS, ARDELL, FAULKINGHAM, HYMES, LIBBY, NEWMAN, QUINT, SMITH
Amends: 36 MRSA §5111, 36 MRSA §5200

Legislative Document
No. 835
H.P. 524
House of Representatives, February 21, 2023
An Act to Phase Out the Income Tax
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative BOYER of Poland.
Cosponsored by Senator BRAKEY of Androscoggin and
Representatives: ANDREWS of Paris, ARDELL of Monticello, FAULKINGHAM of Winter 
Harbor, HYMES of Waldo, LIBBY of Auburn, NEWMAN of Belgrade, QUINT of Hodgdon, 
SMITH of Palermo.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5111, sub-§1-F, as enacted by PL 2015, c. 267, Pt. DD, §3, is 
amended to read:
1-F.  Single individuals and married persons filing separate returns; tax years 
beginning 2017.  For tax years beginning on or after January 1, 2017 but no later than 
December 31, 2027, for single individuals and married persons filing separate returns:
If Maine taxable income is:
The tax is:
Less than $21,050
5.8% of the Maine taxable income
At least $21,050 but less than $50,000
$1,221 plus 6.75% of the excess over 
$21,050
$50,000 or more
$3,175 plus 7.15% of the excess over 
$50,000
Sec. 2.  36 MRSA §5111, sub-§2-F, as enacted by PL 2015, c. 267, Pt. DD, §5, is 
amended to read:
2-F.  Heads of households; tax years beginning 2017.  For tax years beginning on or 
after January 1, 2017 but no later than December 31, 2027, for unmarried individuals or 
legally separated individuals who qualify as heads of households:
If Maine taxable income is:
The tax is:
Less than $31,550
5.8% of the Maine taxable income
At least $31,550 but less than $75,000
$1,830 plus 6.75% of the excess over 
$31,550
$75,000 or more
$4,763 plus 7.15% of the excess over 
$75,000
Sec. 3.  36 MRSA §5111, sub-§3-F, as enacted by PL 2015, c. 267, Pt. DD, §7, is 
amended to read:
3-F.  Individuals filing married joint returns or surviving spouses; tax years 
beginning 2017.  For tax years beginning on or after January 1, 2017 but no later than 
December 31, 2027, for individuals filing married joint returns or surviving spouses 
permitted to file a joint return:
If Maine taxable income is:
The tax is:
Less than $42,100
5.8% of the Maine taxable income
At least $42,100 but less than $100,000
$2,442 plus 6.75% of the excess over 
$42,100
$100,000 or more
$6,350 plus 7.15% of the excess over 
$100,000
Sec. 4.  36 MRSA §5111, sub-§7 is enacted to read:
7.  Phase-out.  For tax years beginning on or after January 1, 2024, for each taxpayer 
filing an income tax return under this chapter, the amount of tax calculated under subsection 
1-F, 2-F or 3-F, as adjusted under section 5403, is reduced as follows:
A.  For tax years beginning in 2024, the amount calculated is multiplied by 80%;
B.  For tax years beginning in 2025, the amount calculated is multiplied by 60%;
C.  For tax years beginning in 2026, the amount calculated is multiplied by 40%; and
D.  For tax years beginning in 2027, the amount calculated is multiplied by 20%.
Sec. 5.  36 MRSA §5111, sub-§8 is enacted to read:
8.  Income tax eliminated.  Beginning January 1, 2028, no taxes are imposed under 
this section.
Sec. 6.  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.  For tax years beginning on or after 
January 1, 2018 but no later than December 31, 2027, 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
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. 7.  36 MRSA §5200, sub-§7 is enacted to read:
7.  Phase-out.  For tax years beginning on or after January 1, 2024, for each taxpayer 
filing an income tax return under this chapter, the amount of tax calculated under subsection 
1-A is reduced as follows:
A.  For tax years beginning in 2024, the amount calculated is multiplied by 80%;
B.  For tax years beginning in 2025, the amount calculated is multiplied by 60%;
C.  For tax years beginning in 2026, the amount calculated is multiplied by 40%; and
D.  For tax years beginning in 2027, the amount calculated is multiplied by 20%.
Sec. 8.  36 MRSA §5200, sub-§8 is enacted to read:
8.  Income tax eliminated.  Beginning January 1, 2028, no taxes are imposed under 
this section.
Sec. 9.  Spending reductions.  Beginning with fiscal year 2024-25, the Department 
of Administrative and Financial Services, Bureau of the Budget shall reduce the budget 
each fiscal year for each department of State Government proportionally to achieve an 
overall reduction in expenditures equal to the reduction of revenue under the Maine 
Revised Statutes, Title 36, section 5111, subsections 7 and 8 and section 5200, subsections 
and 8.
SUMMARY
This bill phases out the income tax over 5 years beginning in 2024 and requires that 
state department budgets be reduced proportionally.