An Act to Amend the Maine Exclusion Amount in the Estate Tax
Maine Legislature, Session 131, LD 1338
Committee: Taxation
Sponsors: COLLINGS
Amends: 36 MRSA §4102, 36 MRSA §4119, 36 MRSA §4120, 36 MRSA §4121

Legislative Document
No. 1338
H.P. 852
House of Representatives, March 28, 2023
An Act to Amend the Maine Exclusion Amount in the Estate Tax
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative COLLINGS of Portland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §4102, sub-§5, as amended by PL 2017, c. 474, Pt. G, §1, is 
repealed and the following enacted in its place:
5.  Maine exclusion amount.  "Maine exclusion amount" means:
A.  For estates of decedents dying on or after January 1, 2013 but before January 1, 
2016, $2,000,000;
B.  For estates of decedents dying on or after January 1, 2016 but before January 1, 
2018, the basic exclusion amount determined for the calendar year in accordance with 
the Code, Section 2010(c)(3);
C.  For estates of decedents dying on or after January 1, 2018 but before January 1, 
2024, $5,600,000; and
D.  For estates of decedents dying on or after January 1, 2024, $2,000,000 plus any 
additional exclusion amount allowed under section 4120.
Sec. 2.  36 MRSA §4119, as amended by PL 2019, c. 607, Pt. D, §5, is further 
amended to read:
§4119.  Annual adjustments for inflation
Beginning in 2018 and each year thereafter ending in 2021, annually, on or about 
September 15th, for the estates of decedents who die during the succeeding calendar year, 
the assessor shall multiply the cost-of-living adjustment by the dollar amount contained in 
section 4102, subsection 5, paragraph C applicable to estates of decedents dying on or after 
January 1, 2018 before January 1, 2024.  Beginning in 2025 and each year thereafter, on or 
about September 15th, for the estates of decedents who die during the succeeding calendar 
year, the assessor shall multiply the cost-of-living adjustment by the dollar amount 
contained in section 4102, subsection 5, paragraph D and section 4120 applicable to estates 
of decedents dying on or after January 1, 2024.  For the purposes of this section, the "cost-
of-living adjustment" is the Chained Consumer Price Index for the 12-month period ending 
June 30th of the preceding calendar year divided by the Chained Consumer Price Index for 
the 12-month period ending June 30, 2017.  If the dollar amount, adjusted by the application 
of the cost-of-living adjustment, is not a multiple of $10,000, any increase must be rounded 
to the nearest multiple of $10,000.
Sec. 3.  36 MRSA §4120 is enacted to read:
§4120.  Additional exclusion amount for family farms and aquaculture, fishing and 
wood harvesting businesses
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Commercial agricultural production" means commercial production of crops, 
maple syrup, honey, plants, trees, compost and livestock.
B.  "Commercial aquacultural production" means the commercial production of 
cultured fish, shellfish, seaweed or other marine plants for human and animal 
consumption, including:
(1)  All cultivating activities occurring at hatcheries or nurseries, from the egg, 
larval or spore stage to the transfer of the product to a growing site; and
(2)  All cultivating activities occurring on water, from the receipt of fish, shellfish, 
seaweed or other marine plants from onshore facilities to the delivery of harvested 
products to onshore facilities for processing.
C.  "Commercial fishing" means attempting to catch fish or any other marine animals 
or organisms with the intent of disposing of them for profit or trade in commercial 
channels and does not include subsistence fishing for personal use, sport fishing or 
charter boat fishing in which the vessel is used for carrying sport anglers to available 
fishing grounds.
D.  "Commercial wood harvesting" means the commercial severance and yarding of 
trees for sale or for processing into logs, pulpwood, bolt wood, wood chips, stud wood, 
poles, pilings, biomass or fuel wood or other products commonly known as forest 
products.
E.  "Depreciable machinery and equipment" means, except as otherwise provided by 
this paragraph, that part of the following machinery and equipment for which 
depreciation is allowable under the Code and repair parts for that machinery and 
equipment:
(1)  New or used machinery and equipment used directly and primarily in 
commercial agricultural production, including self-propelled vehicles; attachments 
and equipment for the production of field and orchard crops; new or used 
machinery and equipment for use directly and primarily in production of milk, 
maple syrup or honey, animal husbandry and production of livestock, including 
poultry; new or used machinery and equipment used in the removal and storage of 
manure; and new or used machinery and equipment not used directly and primarily 
in commercial agricultural production but used to transport potatoes from a truck 
into a storage location;
(2)  New or used watercraft, nets, traps, cables, tackle and related equipment 
necessary to and used directly and primarily in commercial fishing;
(3)  New or used watercraft, machinery or equipment used directly and primarily 
for commercial aquacultural production, including, but not limited to: nets; ropes; 
cables; anchors and anchor weights; shackles and other hardware; buoys; fish 
tanks; fish totes; oxygen tanks; pumping systems; generators; water-heating 
systems; boilers and related pumping systems; diving equipment; feeders and 
related equipment; power-generating equipment; tank water-level sensors; 
aboveground piping; water-oxygenating systems; fish-grading equipment; safety 
equipment; and sea cage systems, including walkways and frames, lights, netting, 
buoys, shackles, ropes, cables, anchors and anchor weights; and
(4)  New or used machinery and equipment used directly and primarily in 
commercial wood harvesting, including, but not limited to, chain saws, skidders, 
delimbers, forwarders, slashers, feller bunchers and wood chippers.
"Depreciable machinery and equipment" does not include a motor vehicle as defined 
in section 1752, subsection 7 or a trailer as defined in section 1752, subsection 19-A.
F.  "Family member" means, whether by blood or legal adoption, the decedent's sibling 
or the spouse of a sibling; parent or grandparent or the spouse of a parent or 
grandparent; ancestor; or lineal descendant.
G.  "Farmland" means land that is or could be classified as farmland under chapter 105, 
subchapter 10 and includes personal property that is exempt from property tax under 
section 655, subsection 1, paragraph C, D, M or O.
2.  Additional exclusion amount.  Notwithstanding any provision of law to the 
contrary, an additional exclusion amount from the estate tax under this chapter of up to 
$3,800,000 is allowed for farmland or depreciable machinery and equipment that is part of 
an estate of a decedent dying on or after January 1, 2024 that is transferred to a family 
member of the decedent.
3.  Requirements for additional exclusion; report.  In order to qualify for the 
additional exclusion from the estate tax pursuant to this section:
A.  The farmland or depreciable machinery and equipment must be transferred to a 
family member;
B.  For at least 5 years following the transfer, the farmland or depreciable machinery 
and equipment must remain the property of the family member to whom the farmland 
or depreciable machinery and equipment was transferred or, in the event of the death 
of that transferee, a family member of that transferee; and
C.  During the 5 years under paragraph B following the transfer:
(1)  The land transferred must continue to meet the requirements for classification 
as farmland under chapter 105, subchapter 10, except that the gross income 
requirements of section 1102, subsection 4 must be met for every year of the 5 
years following transfer; and
(2)  The depreciable machinery and equipment transferred must continue to be used 
for commercial agricultural production, commercial aquacultural production, 
commercial fishing or commercial wood harvesting for every year of the 5 years 
following transfer.
A family member to whom farmland or depreciable machinery and equipment is 
transferred who wishes to claim the additional exclusion under this section shall file a report 
annually for the 5 years following the transfer with the assessor certifying that the farmland 
or depreciable machinery and equipment continues to qualify for the additional exclusion.
4.  Failure to maintain requirements for additional exclusion.  If, at any time during 
the 5 years following the decedent's death, the farmland or depreciable machinery and 
equipment transferred does not meet the requirements of subsection 3, the owner of the 
farmland or depreciable machinery and equipment is subject to the applicable tax specified 
in this chapter based on the fair market value of the farmland or depreciable machinery and 
equipment as of the date of the decedent's death.
5.  Rules.  The assessor shall adopt routine technical rules pursuant to Title 5, chapter 
375, subchapter 2-A to implement this section, including determining the method of 
providing certification of qualification for the additional exclusion provided by this section.
Sec. 4.  36 MRSA §4121 is enacted to read:
§4121.  Distribution of revenue
Beginning January 1, 2024, on a monthly basis, the Treasurer of State shall credit 100% 
of the revenues generated by the reduction in the exclusion amount as described in section 
4102, subsection 5, paragraph D to the Maine State Housing Authority to be used solely to 
support affordable housing.  Twenty-five percent of the funds credited to the Maine State 
Housing Authority pursuant to this section must be used to support affordable housing for 
veterans.
SUMMARY
This bill returns the exclusion amount, below which the Maine estate tax does not 
apply, to $2,000,000 from the $5,600,000 in current law for estates of decedents dying on 
or after January 1, 2024.  The Treasurer of State must credit 100% of the revenues generated 
by the reduction in the exclusion amount to the Maine State Housing Authority to be used 
to support affordable housing.  Twenty-five percent of the amount credited must be used 
to support affordable housing for veterans.
The bill also creates an additional exclusion amount from the estate tax for family farms 
and aquaculture, fishing and wood harvesting businesses of up to $3,800,000. This 
additional exclusion applies to farmland or depreciable machinery and equipment used in 
agriculture, aquaculture, fishing or wood harvesting that is inherited by a family member 
and remains in commercial use for 5 years following transfer.