An Act To Provide Income Tax Relief
Sec. 1. 36 MRSA §5111, sub-§1-C, as enacted by PL 2011, c. 380, Pt. N, §2 and affected by §19, is amended to read:
| If Maine Taxable income is: | The tax is: |
| At least $5,000 but less than $19,950 | 6.5% of the excess over $5,000 |
| $19,950 or more | $972 plus 7.95% of the excess over $19,950 |
Sec. 2. 36 MRSA §5111, sub-§2-C, as enacted by PL 2011, c. 380, Pt. N, §4 and affected by §19, is amended to read:
| If Maine Taxable income is: | The tax is: |
| At least $7,500 but less than $29,900 | 6.5% of the excess over $7,500 |
| $29,900 or more | $1,456 plus 7.95% of the excess over $29,900 |
Sec. 3. 36 MRSA §5111, sub-§3-C, as enacted by PL 2011, c. 380, Pt. N, §6 and affected by §19, is amended to read:
| If Maine Taxable income is: | The tax is: |
| At least $10,000 but less than $39,900 | 6.5% of the excess over $10,000 |
| $39,900 or more | $1,944 plus 7.95% of the excess over $39,900 |
Sec. 4. 36 MRSA §5111, sub-§6 is enacted to read:
| Top marginal tax rate | Percentage of filers |
| 0% | 18% |
| 2% | 22% |
| 4.5% | 22% |
| 7% | 17% |
| 8.5% | 13% |
| 10% | 8% |
(1) When determining the percentage of filers, the assessor shall use the average number of Maine resident filers for the 5 years prior to the calculation.
(2) The percentage of filers must be determined for each filing status of: single persons and married persons filing separately; married persons filing jointly and surviving spouses; and heads of household.
(3) The top marginal tax rates are for Maine taxable income.
summary
This bill reforms the Maine income tax by establishing a rate structure that includes 6 income tax bracket thresholds with top marginal tax rates from 0% to 10%. The income thresholds for each rate are calculated by the State Tax Assessor every 5 years to maintain the same level of progressivity of the tax by maintaining the same percentage of taxpayers in each top marginal rate category.