Maine Senate Approves Corporate Loan Tax Exemption Draft Budget
AUGUSTA – The Maine Senate voted 24-10 to pass additional budget bill that would exempt approximately 28,000 companies from paying state taxes on state paycheck protection loans.
Two Republicans joined a Democratic majority in passing the move after a provision was reintroduced into the bill to restore part of the funding for a position as homeless veterans coordinator in the Bureau of Veterans Services.
This addition also ensures that federal funds for veterans cemeteries in Maine remain earmarked for this use. The additions were necessary to sway Republican scythes Brad Farrin of Norridgewock and Rick Bennett of Oxford and give the bill the two-thirds majority it needed to vacate the Upper Chamber.
The move with the new changes will face a tougher challenge on Thursday in the House of Representatives, where Democrats hold 80 of the 151 seats and need at least 17 Republicans to vote with them to win two-thirds of support and get the bill to government . Janet Mills’ desk.
The debate about determining the tax compliance of the supplementary budget comes as the deadline for filing tax returns is looming. The state filing deadline for businesses is Monday and the deadline for filing income tax is April 15th.
The entire legislature only convened for its second series of COVID-19 restricted sessions on Wednesday since lawmakers were sworn in two months ago.
The budget measure also exempts the first $ 10,200 of unemployment benefits from state income tax, but a split resulted in Republicans withholding support for the bill, as they granted an additional $ 32 million in tax breaks, most of it indistinct, for Businesses called for that reflect the federal tax cuts. some installed before the pandemic.
“At this point, we’ve got a deal to fund veterans, we’ve got a deal previously to fund the entire PPP loan, and in addition we’ve got 160,000 Mainers covered under that unemployment benefit,” said Senate President Troy Jackson.
He said Republicans who still defy the law have a lot to answer for.
“So veterans, corporations, workers and they are going to sacrifice everything for three martini lunches, and this is where they are going to have to face their voters to get a good deal,” Jackson said. “It’s what they wanted, we delivered and we gave them exactly what they wanted and then they added this other thing that is ridiculous.”
Senator Cathy Breen, D-Falmouth, the Senate Chair of the Legislature’s Budget Committee on Funds and Financial Affairs, said the unemployment benefit tax break was an important element for the Democrats.
“People who are unemployed are not doing well,” she said. “That seems to be a justice issue. When we have these tax breaks for this large group, there is this other large group that is frankly struggling, so we’re trying to create tax breaks for them too.
“This supplementary budget proposal is something that every person in this chamber should leave behind.”
Breen and other committee members, including House Chair Teresa Pierce, D-Falmouth, said the veterans issue concession, which is set at about $ 113,000, is easy to do and for every member of the Veterans and the Legal Department assists the Legislative Affairs Committee, including all Republican members of the committee.
Farrin, an Air Force veteran and a member of that committee, endorsed the Senate Veterans Amendment, noting that while it agreed with his Republican counterparts on their other tax matters, reestablishing the Veterans Homeless Coordinator was his “line in the sand.” ”
Breen said the committee held weeks of hearings and the Democrats had clearly moved to compromise on the PPP exemptions.
A first proposal by Democrat Mills included tax breaks for PPP funds of up to $ 1 million. Any funds over $ 1 million should have been subject to state corporation tax. The governor’s proposal covered about 98 percent of the PPP funds that flowed into Maine. Last week, the Democrats essentially lifted the $ 1 million threshold and exempted all PPP loan funds from state income tax, adding an additional $ 100 million to the cost of the bill.
However, Senate Republican leaders insisted that they demand full compliance with federal tax law, including extending a state benefit to businesses on overseas intangible income derived from the export of products tied to intangible assets such as patents, trademarks and Copyrights are bound, held in the US.
Senate minority leader Jeff Timberlake, R-Turner, said his entire group would accept full compliance. He said Republicans were criticized for moving the goal posts on the bill, but not.
“Our target positions were set from Day 1, that’s full tax compliance and that hasn’t changed to this day,” said Timberlake. Without the inclusion, taxes were levied on a group of around 200 companies. “I was never in favor of raising taxes. I’m always in favor of lowering taxes, ”said Timberlake.
Deputy Minority Leader Matthew Pouliot, R-Augusta, also said Republican opposition wasn’t just over the issue of overseas intangible income, which was only about $ 8.4 million of the $ 32 million additional benefit that the Republicans wanted.
Timberlake and Pouliot’s arguments were countered by Senator Nate Libby, D-Lewiston, who said research by the Maine Revenue Service showed that only about 10 Maine-based companies would benefit from the overseas intangible income regime sought by Republicans.
But during a debate in the room, Bennett got no response when he asked his colleagues to explain which Maine companies benefited from the additional tax regulations that the Republicans were demanding.
The supplementary budget was Approved by the Budgets Committee in a party vote last week.
Maine is An additional $ 6 billion in aid is expected to be made available on the US $ 1.9 trillion bailout plan approved by Congress on Wednesday and expected to be signed by President Biden this week.
Republicans had also urged Democrats to approve a move that would require all federal funds spent by the state government to be approved by a two-thirds majority of the legislature, but that demand appeared to fall by the wayside late Wednesday.
While much of this funding will go straight to Maine’s citizens in the form of $ 1,400 in cash or $ 300 in expanded unemployment benefits, state and local government agencies are expected to pay between $ 1.2 billion And received $ 1.7 billion in new federal aid.
Lawmakers meet at the Augusta Civic Center – a larger venue that allows lawmakers to socialize to prevent the spread of the COVID-19 virus.
House MPs also debated a measure offered by Republicans on Wednesday that would end the state of emergency that has existed for nearly a year and lift some of Mills’ orders related to the pandemic. The efforts failed in a line-of-the-line vote in the House of Representatives and would likely be voted in the Senate on Thursday.
House spokesman Ryan Fecteau, D-Biddeford, said late Wednesday that the House would begin drafting the supplementary budget on Thursday.
Fecteau said any federal funding Maine gets in its way would likely still need two-thirds of the support if used by the legislature for an emergency.
He said Republicans who are now backing veterans funding on the committee might be ready to support the full supplementary budget.
“It’s just about how important it is to the Republicans,” said Fecteau. “We agreed on almost every single item on the (bill) except for the $ 32 million they plan to spend on all kinds of tax incentives that go back to 2018.”
CORRECTION: This story was updated at 5:00 p.m. on March 11, 2021 to reflect the details of Gov.’s original proposal. Mills and the changes made by the Democrats.