An Act to Promote Research and Development in the State by
Maine Legislature, Session 132, LD 0926
Sponsors: SAYRE, PIERCE
Amends: 36 MRSA §5219-K

Legislative Document
No. 926
H.P. 591
House of Representatives, March 11, 2025
An Act to Promote Research and Development in the State by 
Amending the Research Expense Tax Credit
Received by the Clerk of the House on March 5, 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 SAYRE of Kennebunk.
Cosponsored by Senator PIERCE of Cumberland and
Representatives: CROCKETT of Portland, MALON of Biddeford, RIELLY of Westbrook, 
ROBERTS of South Berwick, SARGENT of York.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §5219-K, sub-§1, as amended by PL 2007, c. 627, §91, is further 
amended to read:
1.  Credit allowed.  A taxpayer is allowed a credit against the tax due under this Part 
equal to the sum of 5% 10% of the excess, if any, of the qualified research expenses for the 
taxable year over the base amount and 7.5% 15% of the basic research payments 
determined under the Code, Section 41(e)(1)(A).  The term "base amount" means 50% of 
the average amount per year spent on qualified research expenses over the previous 3 
taxable years by the taxpayer.  As used in this section, unless the context otherwise 
indicates, the terms "qualified research expenses," "qualified organization base period 
amount," "basic research" and any other terms affecting the calculation of the credit have 
the same meanings as under the Code, Section 41, but apply only to expenditures for 
research conducted in this State.  In determining the amount of the credit allowable under 
this section, the State Tax Assessor may aggregate the activities of all corporations that are 
members of a controlled group of corporations, as defined by the Code, Section 41(f)(1)(A) 
and in addition may aggregate the activities of all entities, whether or not incorporated, that 
are under common control, as defined by the Code, Section 41(f)(1)(B).
Sec. 2.  36 MRSA §5219-K, sub-§3, as amended by PL 2023, c. 360, Pt. B, §11, is 
further amended to read:
3.  Limitation on credit allowed.  The credit allowed under this section is limited to 
100% of a corporation's first $25,000 $50,000 of tax due, as determined before the 
allowance of any credits, plus 75% of the corporation's tax due, as determined in excess of 
$25,000 $50,000.  The assessor may adopt rules similar to those authorized under the Code, 
Section 38(c)(6)(B).
Sec. 3.  36 MRSA §5219-K, sub-§8 is enacted to read:
8.  Annual report.  On or before December 31st annually, beginning in 2027, the 
assessor shall report to the Department of Economic and Community Development the 
following information for expenditures that receive credit pursuant to this section for the 
taxable year ending during the immediately preceding calendar year:
A.  The absolute value of research and development expenditures in the State by 
calendar year and research and development expenditures as a percentage of the State's 
gross domestic product;
B.  The dollar value of the credits claimed and the number of individuals and 
corporations claiming the credits; and
C.  A list of industry sectors in which credit recipients operate, the absolute value and 
rate of growth of annual gross domestic product of those industry sectors in the State 
and the absolute value and rate of growth of annual payroll in those industry sectors in 
the State.
On or before March 1st annually, beginning in 2027, the department shall report to the joint 
standing committees of the Legislature having jurisdiction over taxation matters and 
economic development matters information on the credit under this section, including any 
information reported by the assessor under this subsection.
Sec. 4.  36 MRSA §5219-K, sub-§9 is enacted to read:
9.  Evaluation; public policy objective; performance measures.  The credit provided 
under this section is subject to legislative review in accordance with Title 3, section 999. 
In developing evaluation parameters to perform the review, the Office of Program 
Evaluation and Government Accountability, the joint legislative committee established to 
oversee program evaluation and government accountability matters and the joint standing 
committee of the Legislature having jurisdiction over taxation matters shall consider:
A.  The specific public policy objectives of the credit provided under this section to 
stimulate research and development investment, to create high-quality jobs by 
encouraging investment in research and development and to encourage the recruitment 
and training of employees and improve the overall economy of the State by expanding 
the number of businesses conducting and investing in research and development; and
B.  Performance measures, including, but not limited to:
(1)  The amount of the tax expenditure credited;
(2)  The absolute value of research and development investment in the State and 
the rate of increase relative to other New England states and the United States;
(3)  The growth in the number of employees at corporations that receive this tax 
credit;
(4)  The growth in the number of employees earning high wages, measured as those 
employees earning 125% or more of the median annual income of the county in 
which the recipient operates; and
(5)  The absolute value of the State's gross domestic product and the rate of increase 
relative to other New England states and the United States.
SUMMARY
This bill increases the research expense tax credit by increasing the amount of 
expenditures eligible for the credit, doubling the rate by which the credit is calculated, 
doubling the maximum amount of the credit that may be claimed and halving the base 
amount used to determine the credit. The bill also establishes an annual reporting 
requirement and considerations that must be taken into account when developing 
evaluation parameters to perform a review of the tax credit.