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MaineLD 68132nd Maine Legislature (2025-2026)HouseWALLET

An Act to Amend the State Tax Laws

Sponsored By: Kristen Cloutier (Democratic)

Signed by Governor

REVENUE SERVICES BUREAUREVENUE SERVICES BUREAU - PROCEDURES

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Bill Overview

Analyzed Economic Effects

9 provisions identified: 2 benefits, 7 costs, 0 mixed.

More flexibility in Pine Tree jobs baseline

If your business qualifies for the Pine Tree Development Zone program, the state can adjust your base level of employment used for benefits. The law replaces the old fixed averaging method. This can help you qualify for or keep employment‑tied tax incentives.

New May 1 property exemption deadline

You must file for a property tax exemption by May 1 each year. The State Tax Assessor provides the form before April 1. You can request an extension of up to 3 months in writing for good cause before taxes are committed. If you miss the deadline or an approved extension, you can lose the exemption for that year. If the assessor sends written questions, you have 30 days to respond, with one 30‑day extension on request. Notices and requests use personal delivery or certified mail and must state the result of not responding.

More casual rentals now taxed

The law taxes more casual rentals and sales. It covers trailers, truck campers, motor vehicles, special mobile equipment, watercraft, and aircraft. Rentals for fewer than 15 days in a year are excluded, unless you offer more than one unit of the same type. If you own more than one unit of the same type, you must collect sales tax on each unit. “Special mobile equipment” does not include farm tractors or lumber harvesting vehicles or loaders. These changes apply to sales made on or after January 1, 2026.

Vehicle sales to tribes counted on tribal land

Starting January 1, 2026, a motor vehicle sale to a tribal member or a tribal entity is sourced to tribal land if the vehicle goes to tribal land right away. Treating the sale as on tribal land can remove Maine sales tax on the sale. Short‑term leases of less than one year are not covered.

Early 457(b) withdrawals lose deduction

Distributions from a 457(b) plan before age 55 are not eligible for the Maine deduction. An exception applies only if the payments are a series of substantially equal periodic payments for your life or joint lives. Most early cash‑outs now increase your state taxable income.

Easier for Maine to file tax liens

The State Tax Assessor can record tax lien notices at a registry of deeds without a notarized acknowledgement. This applies to liens used to collect state taxes under the listed laws. It makes it easier and faster for the state to place a lien on property when taxes are owed.

Nonresident boat rentals lose tax break

Beginning January 1, 2026, leasing or renting a watercraft to a nonresident is not tax‑exempt. The lessor must collect sales or use tax. Nonresident renters pay the tax on these rentals. This change does not affect boat sales, which are covered by separate rules.

Partnership audits: earlier interest, broader years

A year is a “reviewed year” if the partnership files an administrative adjustment request or is audited at the partnership level. Interest and penalties on resulting tax start on the 15th day of the third month after the reviewed year ends. Partnerships may owe more interest if they delay payment.

Employment tax fund excludes some withholding

The state excludes certain income tax withholding from the calculation of payments to the Employment Tax Increment Financing fund. Withholding tied to qualified employees whose wages already support reimbursements to a qualifying business is not counted. This can lower payment amounts tied to jobs in base areas.

Sponsors & Cosponsors

Sponsor

  • Kristen Cloutier

    Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 91 • No: 80

Senate vote • 6/5/2025

ACCEPT REPORT 'A' OUGHT TO PASS

Yes: 18 • No: 14

House vote • 6/4/2025

ACC REPORT "A" OTP

Yes: 73 • No: 66

Actions Timeline

  1. Signed by Governor, ACTPUB Chapter 271

    6/12/2025

  2. PASSED TO BE ENACTED, in concurrence.

    6/9/2025Senate

  3. PASSED TO BE ENACTED. Sent for concurrence. ORDERED SENT FORTHWITH.

    6/9/2025House

  4. Reports ReadOn motion by Senator GROHOSKI of Hancock Report A Ought to Pass Report ACCEPTED. PREVAILED Roll Call Ordered Roll Call Number 375 Yeas 18 - Nays 14 - Excused 3 - Absent 0 Bill READ ONCE. Under suspension of the Rules, READ A SECOND TIME and PASSED TO BE ENGROSSED in concurrence.

    6/5/2025Senate

  5. Reports READ.On motion of Representative CLOUTIER of Lewiston, REPORT A Ought to Pass was ACCEPTED.ROLL CALL NO. 331(Yeas 73 - Nays 66 - Absent 12 - Excused 0)The Bill was READ ONCE.Under suspension of the rules, the Bill was given its SECOND READING without REFERENCE to the Committee on Bills in the Second Reading.The Bill was PASSED TO BE ENGROSSED. Sent for concurrence. ORDERED SENT FORTHWITH.

    6/4/2025House

  6. Carried over, in the same posture, to the next special or regular session of the 132nd Legislature, pursuant to Joint Order SP 519.

    3/21/2025House

  7. Received by the Clerk of the House on January 6, 2025.The Bill was REFERRED to the Committee on TAXATION pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401.

    1/6/2025House

Bill Text

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