Part A also reduces individual income tax rates in 3 ways. First, it reduces the top marginal tax rate from 8.5% to 8.45% for tax years beginning with 2005. Second, for tax years 2006 to 2009, it uses a portion of the revenue savings from the suspension of the annual inflation adjustment to permanently reduce the tax rates over the same period. The annual inflation adjustment is reinstated for tax years beginning after 2009. Third, starting with tax years beginning in 2008, the rates are further reduced 1% each year until the 2005 rates have been reduced by a total of 10% by virtue of this adjustment. This rate reduction is applied prior to, and is in addition to, the rate reduction funded from suspending the inflation adjustment. The rate reductions effected by Part A are permanent. The individual alternative minimum tax rates are also reduced to ensure that taxpayers do not become subject to the Maine alternative minimum tax solely as a result of the regular income tax rate reductions.

Part B establishes a property tax exemption for property of qualified businesses that is first subject to property tax assessment on or after April 1, 2007 in the absence of the exemption. Property first subject to property tax assessment prior to April 1, 2007 will remain eligible for the Business Equipment Tax Reimbursement, "BETR," program for the duration of the 12-year window for BETR program entitlement. Property that is no longer eligible for the BETR program because it has been subject to BETR reimbursement for the full 12-year period for BETR program entitlement is then eligible for the business equipment property tax exemption.

Part B further establishes the rate of reimbursement the State must pay to municipalities for property tax revenue lost as a result of the exemption. For the 2007 and 2008 property tax years, the rate of reimbursement is 75% and for 2009 and subsequent property tax years, the rate of reimbursement is 50%. Municipalities will be reimbursed 100% with respect to property that is no longer eligible for the BETR program because it has been subject to BETR reimbursement for the full 12-year period for BETR program entitlement.

Finally, Part B provides that business property that first became subject to property tax in the absence of the exemption on or after April 1, 2007 does not qualify for the BETR program.