Bill > LD856

This bill proposes to phase out the state income tax in Maine over a five-year period from 2026 to 2029, with a complete elimination of the income tax by January 1, 2030. For individual taxpayers, the bill gradually reduces income tax rates each year: in 2026, taxpayers will pay 80% of their calculated tax; in 2027, 60%; in 2028, 40%; and in 2029, 20%. The same phaseout schedule applies to corporate income taxes. The bill also requires the Department of Administrative and Financial Services to proportionally reduce state department budgets to offset the lost revenue, beginning in fiscal year 2026-27. Additionally, the legislation mandates that by January 1, 2029, the Bureau of Revenue Services must submit corrective legislation to address any statutory conflicts resulting from the income tax elimination. The bill maintains the existing tax brackets and rates for tax years 2017 through 2025 but sets the stage for a complete elimination of both individual and corporate income taxes in Maine by 2030.

Budget and Finance

https://legislature.maine.gov/legis/bills/display_ps.asp?LD=856&snum=132