Maine Tax Alert 1.14.13
Governor LePage has submitted his proposed budget for the biennium that begins on July 1, 2013, which contains a number of state tax changes. Some of the key proposals that will affect Maine’s business taxpayers include:
Elimination of Business Equipment Tax Reimbursement (BETR) and Replacing it with Business Equipment Tax Exemption (BETE)
- BETE would be made applicable to most property currently qualifying for BETR starting with the April 1, 2014 property tax year, but there would be no reimbursement or exemption for property taxes on the BETR-qualified property paid on or after January 1, 2013.
- BETE would not apply to retail business property that currently qualifies for BETR or BETE.
- Under current statute, municipalities receive a minimum reimbursement at a 50% rate for BETE property for property tax years beginning April 1, 2013 and subsequent years. Under the proposed changes, the minimum reimbursement rate would be 60% for 2014, 55% for 2015 and then would revert back to 50% for 2016 and subsequent years.
Suspension of State Income and Sales Tax Revenue Sharing to Municipalities for FY 2014 and FY 2015.
- This will save the state $99 million but will certainly increase property taxes at the local level on non-BETE property.
Sales Tax Imposed on “Products Transferred Electronically.”
- Products delivered to the purchaser by means other than tangible storage media would become taxable. This would clearly make sales of digital books and downloaded music subject to tax. But it also raises serious questions about what else may be covered, particularly as businesses increasingly rely on goods and services delivered or accessed via the internet.
Repeal of Sales Tax Exemption for Publications issued at average intervals not exceeding 3 months.
- Sales of newspapers and magazines would become subject to tax.
Governor LePage’s proposed budget will now be taken up by the Legislature, where it is already generating a great deal of controversy. Substantial changes are likely.