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Mills Administration Proposes Partial Tax Conformity With CARES Act

Scattered through the $2 trillion federal CARES act are dozens of tax changes aimed at softening the economic blow caused by the pandemic. Maine lawmakers now need to decide which of those changes should be incorporated in the state’s tax laws.

Democratic Gov. Janet Mills is proposing that the state conform to some, but not all, of the federal changes, citing extended costs in the tens of millions of dollars.

Maine Revenue Services attorney Daniel D'Alessandro briefed the legislature’s taxation Committee Thursday. “The administration’s proposal is designed to avoid raising taxes and to provide tax stability while conforming to those federal changes that will have the greatest impact on the state of Maine.”

Under current law, Maine businesses would be taxed for any loans forgiven under the Paycheck Protection Program. The Mills proposal would lift the tax on those loans. The cost of the Governor’s proposal is about $10 million over two years, but could change as Congress considers several federal tax adjustments as part of its overall pandemic relief effort.

Journalist Mal Leary spearheads Maine Public's news coverage of politics and government and is based at the State House.