For Immediate Release
AUGUSTA - State Rep. Amy Volk has proposed legislation to provide a 50 percent income tax credit to Maine residents age 60 and older starting with the 2011 tax year. Nonresident taxpayers and part-year resident taxpayers over age 60 also would receive a 50 percent credit on income taxes due in Maine.
Rep. Volk's bill, LD 805, is titled An Act to Decrease the Tax Burden on Maine's Seniors. It has been referred to the Legislature's Taxation Committee, which has scheduled a public hearing on the measure for March 31.
Rep. Volk (R-Scarborough), a first-term legislator, said she introduced the bill to stem the tide of older Mainers who relinquish their Maine residencies. "The bill is aimed primarily at folks who can afford two homes, one here and one in Florida, perhaps," she said. "I personally know of many older Mainers who simply cannot justify paying Maine income tax when they already spend their winters in states with low income tax or no income tax at all.
"For too long, we have just accepted that large numbers of Mainers will leave in November and return in warmer weather with Florida license plates," she added, "Given the financial realities most of us face in retirement, many of us would do the same."
Resistance to the bill will come in the form of a fiscal note - the amount of income tax revenue that would be lost. No fiscal note has been attached to the bill yet, but Rep. Volk is concerned that the process focuses heavily on the cost while totally ignoring the positive fiscal impact - the "upside," as she calls it.
"When Mainers switch residencies to other states, they remove their money from Maine banks and change their accountants, insurance agents, attorneys and financial advisors," she said. "All those professional service providers lose out. They also spend even less time in Maine than they might prefer, so we lose out on the sales taxes they would pay while here, not to mention their patronage of Maine businesses, such as auto dealers, restaurants, grocery stores and so on. Maine towns lose the excise tax on their cars. We even lose their donations to non-profit organizations as they become more vested in other states.
"If Maine had dynamic fiscal notes, a mechanism that would allow us to include the upside as well as the revenue losses, I am confident this bill would be proven to make good financial sense," she said. "When Mainers clear out for six months and a day, we lose an awful lot. With my bill we would capture at least half of their income tax - instead of nothing at all - and get the additional benefit of having these folks here for a longer time each year."
Bill cosponsors include State Rep. Gary Knight, House chair of the Taxation panel, and State Rep. Andre Cushing, assistant leader of the House Republicans. Democratic Sen. Troy Jackson, of Aroostook County, is the Senate sponsor. ###
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