Pine State News

Business associations in Maine are advocating for legislation (LD 191) that would introduce a pass-through entity tax (PTET), aligning the state with 36 others. This optional tax would permit partners and shareholders of S corporations to opt for taxation at the entity level.

“The effect of this is to allow a member of a pass-through entity a credit of 90% of the member’s share of Maine income taxes paid as a pass-through entity,” states the summary for LD 191.

Maine Revenue Services (MRS) recently reported on this matter, highlighting the PTET as a method to circumvent the federal $10,000 cap on state and local tax deductions. MRS noted the administrative challenges in implementing such an option and suggested awaiting federal decisions regarding SALT caps and other expiring tax provisions by 2025. If LD 191 is enacted this year, MRS advises that it apply to tax years starting January 1, 2026.

A public hearing for LD 191 has yet to be scheduled.

In related legislative matters, advocates are pushing for LD 60, which would allow employees to request flexible work schedules. Employers could deny these requests if they conflict with operations but must provide written explanations for denials. A proponent group testified that many workers have little input on their schedules. A work session is planned for March 4 at 2 p.m.

Other notable legislation includes:

- Require Pay Range Disclosure, Pay History Records (LD 54)

- Allow Employees to Request Flexible Work Schedules (LD 60)

- Establish a Pass-through Entity Tax & Tax Credit (LD 191)

- Increase Education Funding Through Additional 3% Tax on Lodging (LD 225)

- Adjust Individual Income Brackets, Add New Top Tax Rates (LD 229)

- Provide Legislative Oversight to Rulemaking Petition Process (LD 236)

- Advance the Maine Retirement Savings Program (LD 355)

- Repeal the Paid Family & Medical Leave Program (LDs 406 &539)

- Provide Five-year Automatic Repeal of Agency Rules (LD490)

- Prohibit Municipality from Prohibiting Particular Energy System or Distributor (LD556)

For more details: https://legislature.maine.gov/

State officials also update answers to frequently asked questions about the Paid Family & Medical Leave law. The latest document features responses to 49 questions available at www.maine.gov/paidleave/.