An Act to Address the Effect of Changes to Federal Income Tax
Maine Legislature, Session 132, LD 0221
Sponsors: CLOUTIER
Amends: 36 MRSA §5231, 36 MRSA §5295

Legislative Document
No. 221
H.P. 144
House of Representatives, January 21, 2025
An Act to Address the Effect of Changes to Federal Income Tax 
Laws on Maine Income Tax Laws
Submitted by the Department of Administrative and Financial Services pursuant to Joint 
Rule 204.
Received by the Clerk of the House on January 16, 2025.  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 CLOUTIER of Lewiston.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5231, sub-§4 is enacted to read:
4.  Material budgetary impact.  The assessor may not grant a generally applicable 
extension of time for payment or filing that would have a material budgetary impact on the 
State without the approval of the Commissioner of Administrative and Financial Services.  
Prior to granting the approval, the commissioner shall report in writing to the Governor the 
nature of the extension and its budgetary impact and shall send a copy of the report to the 
President of the Senate, the Speaker of the House of Representatives, the majority and 
minority leaders of the Senate and House of Representatives, the chair of the joint standing 
committee of the Legislature having jurisdiction over taxation matters and the chair of the 
joint standing committee of the Legislature having jurisdiction over appropriations and 
financial affairs.
Sec. 2.  36 MRSA §5295 is enacted to read:
§5295.  Temporary adjustments to Maine income tax filing requirements based on 
federal changes
1.  Federal income tax law changes; report.  Whenever it appears to the 
Commissioner of Administrative and Financial Services that the Legislature has not had 
the opportunity before the bureau begins processing returns for the most recently completed 
tax year to conform or adjust Maine laws in response to federal income tax law changes 
affecting the tax year, the commissioner shall report in writing to the Governor a 
description of the federal income tax law changes and their potential effect on Maine 
income tax laws and the state budget. The commissioner shall timely send a copy of the 
report to the President of the Senate, the Speaker of the House of Representatives, the 
majority and minority leaders of the Senate and House of Representatives, the chair of the 
joint standing committee of the Legislature having jurisdiction over taxation matters and 
the chair of the joint standing committee of the Legislature having jurisdiction over 
appropriations and financial affairs.
2.  Determination by Governor of temporary adjustment of Maine income tax 
filing requirements.  After receiving the report pursuant to subsection 1, the Governor 
may direct the assessor to temporarily adjust, in a manner determined equitable by the 
Governor, the assessor's administration of the tax year based on some or all of the federal 
income tax law changes as the Governor may equitably determine, contingent on the future 
enactment by the Legislature of legislation that addresses the federal income tax law 
changes. The Governor, to the extent practicable, shall make the determination consistent 
with the intent of the Legislature in enacted Maine income tax laws and consider the 
budgetary implications of the determination and the extent to which the determination 
reduces the complexity of the affected tax year to ease taxpayers' compliance with, and the 
bureau's administration of, Maine income tax laws.
3.  Notice.  Immediately upon making a determination pursuant to subsection 2, the 
Governor shall notify the President of the Senate, the Speaker of the House of 
Representatives, the majority and minority leaders of the Senate and House of 
Representatives, the chair of the joint standing committee of the Legislature having 
jurisdiction over taxation matters and the chair of the joint standing committee of the 
Legislature having jurisdiction over appropriations and financial affairs of the specific 
direction provided to the assessor and the effect of that determination on Maine income tax 
laws and the state budget.
4.  Action by assessor.  Upon receiving the direction of the Governor pursuant to 
subsection 2, the assessor shall proceed in accordance with that direction, including in the 
processing of income tax returns and notices, the acceptance of tax payments and the 
issuance of refunds.
The tax return filing instructions or related public information must:
A.  State that the tax return filing instructions and processing of those returns are, in 
whole or in part, contingent on the enactment by the Legislature of legislation that 
addresses federal income tax law changes;
B.  Explain that a taxpayer may choose to wait for the enactment by the Legislature of 
legislation that addresses federal income tax law changes by filing under extension 
pursuant to section 5231, subsection 4;
C.  Require a taxpayer that files a tax return to do so in a manner consistent with the 
issued tax returns, forms, instructions and other guidance; and
D.  State that if the Legislature enacts legislation that addresses federal income tax law 
changes that are at variance with the filing instructions in effect at the time of filing:
(1)  The affected taxpayer is not subject to interest or penalty for a resulting 
underpayment related to the variance;
(2)  Any incorrect refund will not result in interest or penalty accruing prior to the 
date of enactment of such legislation; and
(3)  The affected taxpayer shall file an amended return to address the variance.
SUMMARY
This bill addresses the situation in which the Legislature has not had the opportunity 
before the Department of Administrative and Financial Services, Bureau of Revenue 
Services begins processing Maine income tax returns to conform or adjust Maine laws in 
response to federal income tax law changes by:
1.  Requiring the Commissioner of Administrative and Financial Services to approve 
an extension of time for payment or filing that would have a material budgetary impact on 
the State.  Prior to approving the extension, the commissioner is required to report in 
writing to the Governor the nature of the extension and its budgetary impact and to send a 
copy of the report to the President of the Senate, the Speaker of the House of 
Representatives, the majority and minority leaders of the Senate and House of 
Representatives, the chair of the joint standing committee of the Legislature having 
jurisdiction over taxation matters and the chair of the joint standing committee of the 
Legislature having jurisdiction over appropriations and financial affairs; 
2.  Requiring the Commissioner of Administrative and Financial Services to report in 
writing to the Governor a description of the federal changes, their potential effect on Maine 
income tax laws and the state budget.  The commissioner is required to send a copy of the 
report to the President of the Senate, the Speaker of the House of Representatives, the 
majority and minority leaders of the Senate and House of Representatives, the chair of the 
joint standing committee of the Legislature having jurisdiction over taxation matters and 
the chair of the joint standing committee of the Legislature having jurisdiction over 
appropriations and financial affairs;
3.  After receiving the report, allowing the Governor to direct the State Tax Assessor 
to temporarily adjust the assessor's administration of the Maine income tax returns based 
on some or all of such federal income tax law changes; and
4.  Requiring the State Tax Assessor, based on direction from the Governor, to provide 
taxpayers the option of waiting to file their tax returns until the Legislature has enacted 
legislation to address the federal income tax law changes by filing for an extension or to 
file their returns consistent with the issued tax returns, forms, instructions and other 
guidance.  If as a result of the changes enacted into law by the Legislature, there is an 
underpayment by or incorrect refund to a taxpayer, penalties and interest accruing before 
the date of enactment may not be imposed.