(2) With respect to all other property, for the taxable year immediately following the taxable year during which the property was first placed in service, the fraction allowed by this paragraph is equal to 5% of the amount added back under subsection 1, paragraph N with respect to the property. For each subsequent taxable year during the recovery period, the fraction is equal to 95% of the amount added back under subsection 1, paragraph N with respect to the property, divided by the number of years in the recovery period minus 2.

In the case of property expensed pursuant to Section 179 of the Code, the term "recovery period" means the recovery period that would have been applicable to the property had Section 179 not been applied.; and

Sec. 6. 36 MRSA §5200-A, sub-§2, ¶P is enacted to read:

P.__For income tax years beginning on or after January 1, 2005, to the extent included in federal adjusted gross income, the amount of qualified transportation fringe benefit program reimbursement provided by an employer to an employee under Section 132 of the Code.

SUMMARY

This bill establishes an income tax modification to exempt from state taxation the amount of qualified transportation fringe benefit program payments provided by an employer to an employee. Qualified benefits include cash reimbursement for transit passes, qualified parking and transportation in certain commuter highway vehicles.