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14. If Two or More Affiliated Corporations File Separate Maine Income Tax Returns, May Each Corporation Use the Lower Corporate Tax Rates to Calculate its Tax Liability?

Maine tax structure applies lower “preferential” rates to the first $250,000 of a corporation’s taxable income. Affiliated corporations that are conducting a unitary business must apply these preferential tax rates to the first $250,000 of taxable income of the entire unitary group. If the corporations in the unitary group file separate Maine returns, the group must elect those members which may use the preferential rates. Once the preferential rates have been utilized, the remaining taxable income of the entire unitary group is subject to the highest corporate tax rate (8.93%). If the affiliated corporations are not conducting a unitary business, each corporation will file a separate return calculating its tax liability independently, each using the preferential rates.

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