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 propertythat 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
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
Sales Tax Imposed on "Products Transferred
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
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.
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Topics covered: Introduction to Tax for Public Finance, Tax-Exemption for State and Local Bonds, Inefficiency in Tax-Exempt Subsidy, Types of Tax-Exempt Bonds, Overview of Federal Income Tax Restrictions...
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