Senate & House – 10 a.m. Tuesday & Thursday
LD 1 – LD 1455 were printed by end of 2015 session
As of today LD 1456 – LD 1586 have been printed for the 2016
Only a handful of bills were printed last week including:
- Provide for tax conformity and funding methods
BUSINESS CASH FLOW FIGHT
Lawmakers agree on conforming Maine income tax law to
federal Sec. 179 expensing for small business and conforming to federal bonus
depreciation for businesses of all sizes – but they are sharply divided along
partisan lines over the duration of conformity.
Gov. Paul LePage and Republicans want Maine to follow federal law and
adopt permanently the federal allowance of $500,000 expensing under Sec. 179 (a
depreciation program available only to small companies). Democrats want only to conform for tax year
2015. The Governor and Republicans also
want Maine to follow federal law and adopt though 2019 the federal bonus
depreciation allowance (Maine Capital Investment Tax Credit); however, Democrats
want only to conform for tax year 2015.
Critics call the depreciation rules a “tax break” – a tax
giveaway – and question whether faster depreciation is really needed or really
leads to economic growth. In fact, there
is no “giveaway”. Section 179 and bonus
depreciation are timing issues that affect cash flow, giving companies less tax
liability in the first year and more in subsequent years for a particular
machinery or equipment investment – and the property is still fully
Conforming only for 2015 means that Maine tax law will allow
small businesses to expense only $25,000 under Sec. 179 for 2016 and future
NFIB is fighting for full conformity – make the $500,000
Sec. 179 expensing allowance permanent and conform to bonus depreciation (Maine
Capital Investment Tax Credit) through 2019.
It will take bipartisan agreement to get legislation passed this February
that takes effect immediately.
GOVERNOR DELIVERS WRITTEN STATE OF THE STATE MESSAGE
Governor LePage on Monday sent an 8-page written State of
the State report to legislators in which he highlights welfare reform, lowering
the income tax, how high electricity prices are costing good jobs, reducing
student debt and attracting youth, fighting the drug crisis, and electing the
right legislative candidates in November.
Lowering the Income Tax – “States with the most prosperity
have the lowest income tax rates or no income tax … Rather than debating a
minimum wage, I want to give a pay raise to all working Mainers: eliminating
the income tax will put $900 million back in the paychecks of Maines.”
High Electricity Prices – “[T]he high cost of electricity in
the manufacturing and industrial sectors continues to kill good jobs for
Mainers … We must plug into the affordable reserves of nearby natural gas and
Attracting Youth – “We think the private sector should be a
partner in reducing student debt and attracting young workers … We have
dollar-for-dollar tax credit legislation” (give a business a tax credit equal
to the amount of student debt it pays off).
HEARINGS & WORK SESSIONS
Bid Preference (LD 1525) – A work session will be held Feb. 10
at 1:45 p.m. on a proposal that encourages the purchase of products made in Maine
and in the United States and gives a 5% preference to Maine businesses when awarding
contracts to the best-value bidder. The
state’s Division of Purchases opposes the legislation.
Independent Contractor Predetermination (LD 1553) – A work
session will be held Feb. 11 at 1 p.m. legislation on a proposal from the
Workers Compensation Board that does several things including limiting the
scope of the rebuttable presumptions to insurance law issues, not workers
compensation (except for landowners); raising the cap for assessments on
insurance companies and self-insureds to fund Board operations; and, empowering
the Board to assess penalties on employees misclassified as independent
contractors even if the employer has a workers compensation policy for
employees. The WCB executive director is
expected to propose an amendment at the work session that amended the proposed
change in how the rebuttable presumption functions. NFIB has concerns about any changes in the
rebuttable presumption law and the effect on small contractors.
Modernize Highway User Fees (LD 1110) – Work will continue
Feb. 11 at 1 p.m. on this legislation, carried over from 2015, that proposes
various changes in the way revenues are obtained for the Highway Fund and
“yield predictable funding levels”. Some
legislators say the current low gas prices is a good time to raise the gas tax,
but such an attempt would likely meet with stiff opposition from Governor
LePage. NFIB opposes efforts to increase
taxes or fees on highway users.
Household Batteries & Solid Waste Law Changes (LD 1578) –
A hearing will be held Feb. 17 at 10 a.m. on legislation that updates the
Maine’s Solid Waste Management Laws including the establishment of a
stewardship program for small batteries; expanding the returnable container law
to include Maine-produced apple cider and Maine-produced blueberry juice;
requiring composting of organic waste produced by large-quantity generators;
adjusting the fuel quality standards for construction and demolition debris;
and, pushing out to 2021 the goal of recycling 50% of waste that would otherwise
be buried in a municipal landfill.