Changes in Tax Law; Budget Bill Signed by Gov. Paul LePage

by The ARB Team

Personal income tax, property tax, real estate transfer tax, and hospital tax are among the categories affected by the tax law changes within the budget bill signed by Gov. Paul LePage on July 4, 2017. We advise all our friends and clients to take a look at the summary of key tax law changes below.

What changes for personal income tax?

The controversial 3 percent tax surcharge on income over $200,000, revenues of which were intended to fund public education, was repealed for tax years beginning on or after January 1, 2017.

Previously, for tax years beginning after January 2000, Title 22, chapter 250-A allowed a taxpayer receiving a refund to designate a portion of said refund to the Bone Marrow Screening Fund or, under Title 22, section 1700-A, to the Maine Asthma and Lung Disease Research Fund. These checkoffs have been eliminated under the budget bill.

What changes for property tax?

Under previous Maine legislation, homestead exemptions were to recover from the State 62.5% of the taxes lost by reason of the exemptions under section 683, subsections 1 and 1-B for property tax years beginning on or after April 1, 2017.

The budget bill has pushed the State reimbursement increase out to property tax years beginning on or after April 1, 2018.

What changes for real estate transfer tax?

5 million in revenues from the real estate transfer tax, previously slated for the Housing Opportunities for Maine Fund within the Maine Housing Authority, now goes to the General Fund – 2.5 million from the 2017-18 fiscal year and 2.5 million from the 2018-19 fiscal year.

What changes for hospital tax?

Under Title 22, subchapter 3, the budget bill moves the base year for the hospital tax from 2012 to 2014.

Please contact our office if you have any questions regarding these changes and how they may affect you or your business.

 

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