Sec. 1. 36 MRSA §5210, sub-§3, as enacted by PL 1981, c. 698, §187, is repealed.

Sec. 2. 36 MRSA §5211, sub-§8, as amended by PL 1991, c. 502, §1 and affected by §2, is further amended to read:

8. Formula for apportionment of income to State. All income shall must be apportioned to this State by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus twice the sales factor, and the denominator of which is 4 the total sales of the taxpayer in this State during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period.

Sec. 3. 36 MRSA §5211, sub§§9 to 14, as enacted by P&SL 1969, c. 154, §F, are repealed.

Sec. 4. 36 MRSA §5211, sub-§17, ¶¶B and C, as enacted by P&SL 1969, c. 154, §F, are amended to read:

B. The exclusion of any one or more of the factors the sales factor;

C. The inclusion or substitution of one or more additional factors which that will fairly represent the taxpayer's business activity in this State; or

Sec. 5. 36 MRSA §5244, as amended by PL 1997, c. 24, Pt. C, §12 and affected by §16, is further amended to read:

§5244. Combined report

The combined report required by section 5220, subsection 5, must include, both in the aggregate and by corporation, a list of the federal taxable income, the modifications provided by section 5200-A, the property, payroll and sales in Maine and everywhere as defined in chapter 821 and the Maine net income of the unitary business. Neither the income nor the property, payroll and sales of a corporation that is not required to file a federal income tax return may be included in the combined report.

SUMMARY

This bill changes the income tax formula for apportionment of income from a business activity that is taxable both in this State and in another taxing jurisdiction. The bill eliminates the consideration of the property factor and the payroll factor