For Immediate Release
Date: 11/04/09
State Sen. Richard Nass announced today that the Joint Standing Committee on Taxation has approved an emergency provision to a bill that would exempt severance pay from the Maine income tax. The emergency preamble to the legislation means that it would take effect immediately after being enacted by the Legislature and signed by the governor.
Without the emergency provision, the bill wouldn't take effect until September. "That's not fast enough," said Sen. Nass (R-York). "When you have to pay a mortgage and provide food for your family, you need relief immediately."
The bill, LD 197, "An Act to Provide Tax Relief to Workers Who Lose their Jobs Due to Business Closure," is sponsored by Rep. Gary Knight (R-Livermore Falls) and designed to shield severance pay from Maine's 8.5 percent income tax. The bill, which applies retroactively to severance payments received after January 1, 2008, received the unanimous support of the Taxation Committee on March 24, and is now headed to the full House and Senate.
"Southern Maine is often seen as the 'rich' part of the state. The harsh reality is that our citizens are losing jobs at an alarming rate," said Nass "In my district alone, the last year has seen the closing of Prime Tanning in Berwick, the layoffs of almost 400 people at Spencer Press, layoffs at Whatman in Sanford, and layoffs at Pratt Whitney, one of the area's largest and most stable employers. It defies common sense in such a difficult time to subject their severance pay to state taxes."
Nass, along with Rep. Cathleen Chase (R-Wells), and Governor Baldacci recently met with Wells town officials after the shocking announcement of Spencer Press/RR Donnelley's planned permanent closing of its Wells plant. Nass has also worked with members of Prime Tanning after their announced closure this past fall.
"We don't know for sure how long this national economic downturn will last. Regardless, Maine must position itself to emerge as a financially healthier state then it was when this began. We can only do that by keeping our young working families in Maine. This bill is a first step."
Contact:
Bonnie Gould
Maine Senate Republicans
Tel: (207) 287-1505
Fax: (207) 287-1527