Weekly Column: Many Eligible for Tax Relief

April 4, 2007

A group of Republicans and Democrats on the Legislature’s Taxation Committee right now are working very hard to forge a comprehensive tax reform package, which hopefully can bring about broad agreement amongst all legislators. These discussions can be tricky because what seems like a perfectly reasonable idea to one lawmaker often makes no sense to another. While these debates can be challenging, they are a healthy part of the legislative process.

One tax relief program that has been bringing some nice relief to Maine people since its creation is the Maine Residents Property Tax and Rent Refund Program. The tax relief program commonly referred to as the “Circuit Breaker” program actually sends rebate checks back to Maine homeowners and renters who qualify.

In the past, Circuit Breaker really only provided tax relief for lower income homeowners and renters, but thanks to a major change by the legislature a few years ago, the income guidelines have been expanded to include married couples owning homes with combined incomes less than $99,500 and single homeowners who make less than $77,000. One of the other qualifications is that your property taxes must have exceeded four percent of your income. Homeowners who meet these qualifications could be eligible to receive a rebate check back from the state as high as $2,000.

For renters, the Circuit Breaker program also provides the same rebate benefits. Those paying more than 20 percent of their income in rent could also see money back from the state under the program. In one example, a single person making $30,000 but who pays $13,200 in rent (with heat included) could receive a rebate check back from the state in the amount of $522.

With these changes to the Circuit Breaker program, an estimated 230,000 Maine residents are eligible to receive a rebate check from the state, but with this year’s deadline approaching only about 100,000 households have applied.

The Circuit Breaker program is based on the previous tax year, and in this case, the previous tax year is 2005. Since the most recent Circuit Breaker applications have been available since August 2006, the current deadline to qualify for the 2005 tax year for Circuit Breaker program is May 31st. Since August, more than 2,375 people in Augusta, China, Vassalboro, Hallowell, and Winthrop have received rebate checks back from the state. The average refund so far from the people from those communities is $359.

Maine’s tax burden like any other state affects its people and businesses in different ways. As the legislature continues to work hard to come up with a comprehensive tax reform plan that reduces our property tax and income tax burden, I want to remind everyone that there are some programs right now like Circuit Breaker that do work.

To take advantage of the Circuit Breaker program before the upcoming May 31st deadline, please download a form online at: www.mainesenate.org/taxreform. Look for a link labeled Property Tax and Rent Refund Application (PDF). You may also contact your local municipal office for an application or my legislative office at 287-1515.

Libby Mitchell is the Senate Majority Leader in the Maine Senate. She represents the communities of Augusta, Vassalboro, China, Oakland, and Sidney for District 24.