AUGUSTA – Governor Paul R. LePage is pleased to announce Maine’s rating of “most improved” in tax rankings.
The Tax Foundation released recently its 2013 State Business Tax Climate Index comparing tax rates and policies across states. Maine saw the greatest improvement in its tax ranking this year, moving from 37th to 30th on the list. The positive momentum is attributable to the LePage Administration’s efforts to reduce the tax burden on Maine residents and businesses, according to the Tax Foundation. The Index specifically identifies the repeal of the individual alternative minimum tax for individuals and the expiration of a temporary ban on net operating loss carry forwards as two key factors in the tax climate improvement.
“The reduction of the tax burden on residents and businesses will lead to more and better jobs in Maine,” said Governor LePage. “It is notable that Maine had the most sizable rank improvement this year, as a result of the repeal of our individual alternative minimum tax and a change in treatment of net operating losses. By removing burdensome government regulations the people of Maine will prosper again.”
Within New England, Maine ranked higher than Connecticut (40th), Rhode Island (46th), and Vermont (47th). Maine’s corporate tax component improved 6 places from 2012 to 2013, the second-most for any state, and the individual income tax component improved three places, tied with Idaho for the most in the nation.
Additional changes to Maine’s tax structure, including lower brackets for individual income taxes that take effect January 1, 2013, were not considered in this year’s report and will likely result in even further improvements in Maine’s ranking. Estimates indicate approximately 440,000 Maine resident returns will have an average reduction in their individual income tax liability of $340 in tax year 2013, an average decrease of 11 percent. A family of four, according to Maine Revenue Service, with $50,000 of Maine Adjusted Gross Income will have a reduction of $300 or a 25 percent cut.