Lawmakers in Maine are currently discussing changes to the state’s tax code, focusing on whether to align with recent federal income tax updates. The Taxation Committee is considering recommendations for LD 2010, which addresses conformity with federal rules that affect Maine’s gross taxable income.
The National Federation of Independent Business (NFIB) has called for full conformity on Section 179 expensing, a measure supported by Governor Janet Mills. The governor also supports aligning state rules with federal guidelines on research and development expenses for small businesses. These issues are part of the broader discussions around the Governor’s General Fund Supplemental Budget proposal, known as LD 2212.
LD 2212 includes an optional Pass-through Entity Tax (PTET), designed to help certain taxpayers reduce their federal tax burden.
A significant and contentious issue in the budget proposal is the suggested elimination of the Business Equipment Tax Reimbursement (BETR) program. Data from the Maine Revenue Service shows that hundreds of businesses benefit from BETR, but a small number of large companies receive most of the reimbursements. In 2023, just 25 companies accounted for 67% of total BETR payments, while 14 companies made up half of all reimbursements. Large firms have expressed concern about what they see as a potential indirect tax increase if BETR is discontinued. All businesses receiving BETR funds would face some level of increased taxes if the program ends.
More details about the Supplemental Budget can be found at https://www.maine.gov/budget/.
In addition to tax matters, employers are preparing for new Paid Family & Medical Leave (PFML) benefits set to begin May 1st. Over 900 people participated in a recent webinar hosted by the Maine Department of Labor and NFIB to inform employers about upcoming requirements. Resources from this event are available in the “Employer Resources” section at https://www.maine.gov/paidleave/.
Legislative hearings and work sessions are concluding for new bills introduced in the 2026 session and those carried over from last year. Information about notable legislation, including LD 2212—the Supplemental General Fund Budget covering fiscal years ending June 30, 2026, and June 30, 2027—is available at https://legislature.maine.gov/.
