Significant Tax Reform

  • Lowered the top marginal individual income tax rate from 8.5% to 7.15%.  Largest tax cut in Maine history.
  • Increased the death tax exemption from $1 million to $5.45 million (same as federal exemption and indexed for inflation).
  • Expanded the Education Opportunity Tax Credit for businesses paying student loans of employees, allowing companies a dollar-for-dollar tax credits if they pay off their employees' student debt.
  • Exempted Military Retiree Pension Income from the state income tax.
  • Enacted an income tax exemption for active duty military pay earned outside of Maine.
  • Exempted sales tax on fuel used in agriculture and forestry.
  • Eliminated tax charged on meals in retirement facilities. 
  • Stopped the automatic annual increase in the gas tax.
  • Conformed personal exemptions and doubled the federal standard deduction; eliminated the marriage penalty and the alternative minimum tax.
  • Adopted tax conformity with federal government to provide predictability for Maine's businesses to plan growth and investments.
  • Increased pension exemption from $6,000 to $10,000 and extended the deduction to IRA income.