Sec. GG-1. 36 MRSA §111, sub-§1-A, as amended by PL 2001, c. 441, §1 and affected by §2, is further amended to read:
1-A. Code. "Code" means the United States Internal Revenue Code of 1986 and amendments to that Code as of December 31, 2000 March 15, 2002.
Sec. GG-2. 36 MRSA §112, sub-§12 is enacted to read:
12. State Tax Assessor to calculate conformity factor. On September 2, 2002, the State Tax Assessor shall calculate the conformity factor for tax years beginning in 2002 that will produce a net General Fund revenue reduction in fiscal year 2002-03 equal to the amount transferred from the Tax Conformity Reserve. The State Tax Assessor shall use the conformity factor to administer the income tax modification provided by section 5122, subsection 1, paragraph N and section 5200-A, subsection 1, paragraph N unless those sections have been repealed.
Sec. GG-3. 36 MRSA §4062, sub-§1-A is enacted to read:
1-A. Federal credit. "Federal credit" means the maximum credit for state death taxes determined under the Code, Section 2011.
Sec. GG-4. 36 MRSA §4063, as amended by PL 1999, c. 414, §34, is further amended to read:
§4063. Tax on estate of resident
1. Amount. A tax is imposed upon the transfer of the estate of every person who dies prior to January 1, 2002 or after December 31, 2002 and who, at the time of death, was a resident of this State. The amount of this tax is equal to the amount by which the maximum federal credit for state death taxes determined under the Code, Section 2011, in this chapter sometimes referred to as the "credit," exceeds the lesser of:
A. The aggregate amount of all constitutionally valid estate, inheritance, legacy and succession taxes actually paid to the several states of the United States, other than this State, in respect of any property owned by that decedent or subject to those taxes as a part of or in connection with the decedent's estate; or and
B. An amount equal to such proportion of such allowable the federal credit as the value of properties taxable by other states bears to the value of the entire federal gross estate wherever situated.
2. Values. All values shall be under subsection 1 are as finally determined for federal estate tax purposes.
Sec. GG-5. 36 MRSA §4063-A is enacted to read:
§4063-A. Tax on estate of resident
1. Amount. A tax is imposed upon the transfer of the estate of a person who dies during the calendar year 2002 and who, at the time of death, was a resident of this State. The amount of this tax is equal to the lesser of:
A. The federal estate tax calculated prior to the application of the federal credit; and
B. The amount by which the federal credit divided by .75 exceeds the lesser of:
(1) The aggregate amount of all constitutionally valid estate, inheritance, legacy and succession taxes actually paid to the several states of the United States, other than this State, in respect of any property owned by that decedent or subject to those taxes as a part of or in connection with the decedent's estate; and
(2) An amount equal to such proportion of the federal credit as the value of properties taxable by other states bears to the value of the entire federal gross estate wherever situated.
2. Values. All values under subsection 1 are as finally determined for federal estate tax purposes.
Sec. GG-6. 36 MRSA §4064, as amended by PL 1999, c. 521, Pt. A, §10, is further amended to read:
§4064. Tax on estate of nonresident
A tax is imposed upon the transfer of real property and tangible personal property situated in this State and held by an individual who dies prior to January 1, 2002 or after December 31, 2002 and who at the time of death was not a resident of this State. When real or tangible personal property has been transferred into a trust, the tax imposed by this section applies as if the trust did not exist and the property was personally owned by the decedent. Maine property is subject to the tax imposed by this section to the extent that such property is included in the decedent's gross estate as finally determined for federal estate tax purposes. The amount of this tax is a sum equal to that proportion of the federal credit for state death taxes provided by the Code, Section 2011 that the value of Maine real and tangible personal property taxed in this State that qualifies for the credit bears to the value of the decedent's total federal gross estate. All values are as finally determined for federal estate tax purposes. The share of the federal estate death tax credit used to determine the amount of the a nonresident individual's estate tax under this section is computed without regard to whether the specific real or tangible personal property located in the State is marital deduction property.
Proceeds from the sale of property are taxable under this section if such those proceeds are included in the total federal gross estate and the sale was made in contemplation of death. A sale of property made within 6 months prior to the death of the grantor is deemed to be in contemplation of death within the meaning of this section.
Sec. GG-7. 36 MRSA §4064-A is enacted to read:
§4064-A. Tax on estate of nonresident
1. Amount. A tax is imposed upon the transfer of real property and tangible personal property situated in this State and held by an individual who dies during the calendar year 2002 and who at the time of death was not a resident of this State. When real or tangible personal property has been transferred into a trust, the tax imposed by this section applies as if the trust did not exist and the property was personally owned by the decedent. Maine property is subject to the tax imposed by this section to the extent that such property is included in the decedent's gross estate as finally determined for federal estate tax purposes. The amount of this tax is equal to the lesser of:
A. That proportion of the federal estate tax calculated prior to the application of the federal credit that the value of Maine real and tangible personal property taxed in this State that qualifies for the credit bears to the value of the decedent's total federal gross estate; and
B. That proportion of the federal credit divided by .75 that the value of Maine real and tangible personal property taxed in this State that qualifies for the credit bears to the value of the decedent's total federal gross estate.
All values are as finally determined for federal estate tax purposes. The share of the federal credit used to determine the amount of a nonresident individual's estate tax under this section is computed without regard to whether the specific real or tangible personal property located in the State is marital deduction property.
2. Proceeds from sale of property. Proceeds from the sale of property are taxable under this section if those proceeds are included in the total federal gross estate and the sale was made in contemplation of death. A sale of property made within 6 months prior to the death of the grantor is deemed to be in contemplation of death within the meaning of this section.
Sec. GG-8. 36 MRSA §5122, sub-§1, ¶J, as amended by PL 1999, c. 731, Pt. X, §1 and affected by §§4 and 5, is further amended to read:
J. The amount claimed as a business expense that is included in the investment credit for the high-technology investment tax credit; and
Sec. GG-9. 36 MRSA §5122, sub-§1, ¶K, as amended by PL 1999, c. 731, Pt. X, §2 and affected by §§4 and 5, is further amended to read:
K. For income tax years beginning on or after January 1, 1997, all items of loss, deduction and other expense of a financial institution subject to the tax imposed by section 5206, to the extent that those items are passed through to the taxpayer for federal income tax purposes, including, if the financial institution is an S corporation, the taxpayer's pro rata share and, if the financial institution is a partnership or limited liability company, the taxpayer's distributive share. An addition may not be made under this paragraph for any losses recognized on the disposition by a taxpayer of an ownership interest in a financial institution.;
Sec. GG-10. 36 MRSA §5122, sub-§1, ¶¶M and N are enacted to read:
M. The absolute value of the amount of any net operating loss arising from a tax year beginning or ending in 2001 that the taxpayer, pursuant to Section 102 of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-147, carries back more than 2 years to the taxable year for federal income tax purposes; and
N. For any taxable year beginning in 2002, an amount equal to the net increase in depreciation attributable to a 30% bonus depreciation deduction claimed by the taxpayer pursuant to Section 101 of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-147 with respect to property placed in service during the taxable year, multiplied by the factor obtained by subtracting from the number 1.0 the conformity factor calculated by the State Tax Assessor under section 112, subsection 12.
Sec. GG-11. 36 MRSA §5122, sub-§2, ¶J, as amended by PL 1999, c. 521, Pt. C, §4 and affected by §9, is further amended to read:
J. Any To the extent included in federal adjusted gross income, any amount constituting a qualified withdrawal from an account established pursuant to Title 20-A, chapter 417-E and used for paying higher education expenses;
Sec. GG-12. 36 MRSA §5122, sub-§2, ¶¶P and Q are enacted to read:
P. An amount equal to the absolute value of any net operating loss arising in a tax year beginning or ending in 2001 for which federal adjusted gross income was increased in accordance with subsection 1, paragraph M and that, pursuant to Section 102 of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-147, was carried back more than 2 years to the taxable year for federal income tax purposes, but only to the extent that:
(1) Maine taxable income is not reduced below zero;
(2) The taxable year is either within 2 years prior to the year in which the loss arose or within the allowable federal period for carry-over of net operating losses; and
(3) The amount has not been previously used as a modification pursuant to this subsection;
Q. For tax years beginning in 2003, 2004 or 2005, an amount equal to 1/3 of any amount added back to federal adjusted gross income by the taxpayer for the 2002 tax year pursuant to subsection 1, paragraph N, except with respect to 3-year property, in which case this paragraph does not apply to 2005 tax years and the amount to be subtracted pursuant to this paragraph in the 2004 tax year is an amount equal to 2/3 of the amount added back pursuant to subsection 1, paragraph N.
Sec. GG-13. 36 MRSA §5200-A, sub-§1, ¶K, as amended by PL 1997, c. 746, §8 and affected by §24, is further amended to read:
K. The amount claimed as a business expense that is included in the investment credit for the high-technology investment tax credit; and
Sec. GG-14. 36 MRSA §5200-A, sub-§1, ¶L, as enacted by PL 1997, c. 746, §9 and affected by §24, is amended to read:
L. For income tax years beginning on or after January 1, 1997, all items of loss, deduction and other expense of a financial institution subject to the tax imposed by section 5206, to the extent that those items are passed through to the taxpayer for federal income tax purposes, including, if the financial institution is an S corporation, the taxpayer's pro rata share and, if the financial institution is a partnership or limited liability company, the taxpayer's distributive share. An addition may not be made under this paragraph for any losses recognized on the disposition by a taxpayer of an ownership interest in a financial institution.;
Sec. GG-15. 36 MRSA §5200-A, sub-§1, ¶¶M and N are enacted to read:
M. The absolute value of the amount of any net operating loss arising from a tax year beginning or ending in 2001 that the taxpayer, pursuant to Section 102 of the federal Job Creation and Worker Assistance Act of 2002, Public Law 107-147, carries back more than 2 years to the taxable year for federal income tax purposes; and
N. For any taxable year beginning in 2002, an amount equal to the net increase in depreciation attributable to a 30% bonus depreciation deduction claimed by the taxpayer pursuant to Section 101 of the federal Job Creation Worker Assistance Act of 2002, Public Law 107-147 with respect to property placed in service during the taxable year, multiplied by the factor obtained by subtracting from the number 1.0 the conformity factor calculated by the State Tax Assessor under section 112, subsection 12.
Sec. GG-16. 36 MRSA §5200-A, sub-§2, ¶J, as amended by PL 1999, c. 708, §40, is further amended to read:
J. An amount equal to an income tax refund to the taxpayer by this State or another state of the United States that is included in that taxpayer's federal taxable income for the taxable year under the Code, but only to the extent that:
(1) Maine net income is not reduced below zero; and
(2) The amount to be refunded from this State or another state of the United States has not been previously used as a modification pursuant to this subsection.
If this modification amount results in Maine net income that is less than zero for the taxable year, the negative modification amount may be carried back or forward in the same manner as a net operating loss deduction carry-back or carry-forward to a taxable year that is within the allowable federal period for a carry-back or carry-forward, subject to the above limitations; and
Sec. GG-17. 36 MRSA §5200-A, sub-§2, ¶K, as amended by PL 1999, c. 708, §41, is further amended to read:
K. Interest or dividends on obligations or securities of this State and its political subdivisions and authorities to the extent included in federal taxable income.;
Sec. GG-18. 36 MRSA §5200-A, sub-§2, ¶¶L and M are enacted to read:
L. An amount equal to the absolute value of any net operating loss arising from a tax year beginning or ending in 2001 for which federal taxable income was increased under subsection 1, paragraph M and that, pursuant to Section 102 of the federal Job Creation and Work Assistance Act of 2002, Public Law 107-147, was carried back more than 2 years to the taxable year for federal income tax purposes, but only to the extent that:
(1) Maine taxable income is not reduced below zero;
(2) The taxable year is either within 2 years prior to the year in which the loss arose or within the allowable federal period for carry-over of net operating losses; and
(3) The amount has not been previously used as a modification pursuant to this subsection; and
M. For tax years beginning in 2003, 2004 or 2005, any amount equal to 1/3 of any amount added back to federal taxable income by the taxpayer for the 2002 tax year pursuant to subsection 1, paragraph N, except with respect to 3-year property, in which case this paragraph does not apply to 2005 tax years and the amount to be subtracted pursuant to this paragraph in the 2004 tax year is an amount equal to 2/3 of the amount added back pursuant to subsection 1, paragraph N.
Sec. GG-19. 36 MRSA §5203-A, sub-§1, ¶A, as amended by PL 1997, c. 746, §13 and affected by §24, is repealed and the following enacted in its place:
A. "Adjusted federal tentative minimum tax" means federal tentative minimum tax adjusted by that portion of the taxpayer's federal tentative minimum tax that is attributable to:
(1) Income that the states are prohibited under federal law from subjecting to income tax;
(2) Income, loss or deductions that the State excludes from or adds back to federal adjusted gross income or federal taxable income; or
(3) Items of tax preference and adjustment as specified in the Code, Sections 56 and 57 attributable to income, loss or deductions that the State excludes from or adds back to federal adjusted gross income or federal taxable income.
Sec. GG-20. PL 2001, c. 358, Pt. G, §3 is repealed.
Sec. GG-21. Tax Conformity Reserve. The Tax Conformity Reserve is established as an account in the General Fund to be used to reserve funds against revenue reductions in fiscal year 2002-03 that may result from the State taking action to conform the State's tax laws to the United States Internal Revenue Code for tax years beginning on or after January 1, 2002 and before January 1, 2003. At the close of fiscal year 2001-02, the State Controller shall transfer from the uncommitted balance of the Maine Rainy Day Fund an amount up to $15,253,568 to the Tax Conformity Reserve. The State Controller shall certify to the State Tax Assessor the amount transferred to the Tax Conformity Reserve at the close of fiscal year 2001-02 and then transfer the balance to the General Fund.
Sec. GG-22. General Fund Medicaid adjustments and transfer of funds in fiscal years 2001-02 and 2002-03. Notwithstanding the Maine Revised Statutes, Title 5, section 1585, or any other provision of law, the State Budget Officer shall calculate the amount in fiscal years 2001-02 and 2002-03 that applies against each General Fund Medicaid program in the Department of Behavioral and Developmental Services, the Department of Human Services and the Department of Labor as a result of any federal change in the federal financial participation rate for Medicaid and shall transfer the calculated amounts by financial order to the Maine Rainy Day Fund upon the approval of the Governor. These transfers are considered adjustments to appropriations in fiscal years 2001-02 and 2002-03. The State Budget Officer shall provide the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs, the State Tax Assessor and the State Controller a report of the transferred amounts. The State Controller, upon receipt of the report from the State Budget Officer, shall immediately transfer the calculated amounts to the Maine Rainy Day Fund.
Sec. GG-23. State Controller; post-closing. The State Controller is authorized to keep open the official system of general accounts of State Government for fiscal year 2001-02 in order to make post-closing entries and adjustments to carry out the provisions of this Part until September 30, 2002.
Sec. GG-24. Transfer of funds. Notwithstanding any other provision of law, on June 30, 2002 the State Controller shall transfer $12,557,435 from the Revenue Reserve established by Public Law 2001, chapter 439, Part EE to the General Fund.
Sec. GG-25. Transfers from unappropriated surplus at close of fiscal year 2001-02. Notwithstanding any other provision of law, at the close of fiscal year 2001-02 the State Controller shall transfer from the unappropriated surplus of the General Fund after all required deductions of appropriations and budgeted financial commitments the following amounts in order of priority below:
1. Transfers to the State Contingent Account pursuant to the Maine Revised Statutes, Title 5, section 1507;
2. Transfers to the Maine Rainy Day Fund pursuant to Title 5, section 1513 and the Retirement Allowance Fund pursuant to Title 5, section 1517.
A. The transfers will be shared based on the available balance in the unappropriated surplus, with 75% designated for transfer to the Maine Rainy Day Fund and 25% designated to the Retirement Allowance Fund pursuant to Title 5, section 1517. The amounts transferred to the Maine Rainy Day Fund pursuant to this paragraph may not exceed $5,100,000 and the amounts transferred to the Retirement Allowance Fund pursuant to Title 5, section 1517 may not exceed $2,300,000. If the amount transferred to the Maine Rainy Day Fund pursuant to this paragraph reaches $5,100,000 before the amount transferred to the Retirement Allowance Fund pursuant to this paragraph reaches $2,300,000, then 100% of the amounts transferred pursuant to this paragraph must be transferred to the Retirement Allowance Fund until the cap of $2,300,000 is reached; and
3. Transfers to the Reserve for General Fund Operating Capital pursuant to Title 5, section 1511, except that, at the close of fiscal year 2001-02, no transfers are authorized to the Loan Insurance Reserve pursuant to that section for fiscal year 2001-02 only.
After the transfers in subsections 1 to 3 have been made, any remaining balance after all required deductions of appropriations and budgeted financial commitments must be transferred to the Maine Rainy Day Fund pursuant to Title 5, section 1513.
Sec. GG-26. Application date. Except as otherwise provided by this section, this Part applies to tax years beginning on or after January 1, 2001. Those sections of this Part that enact the Maine Revised Statutes, Title 36, section 5122, subsection 1, paragraph M; section 5122, subsection 2, paragraph P; section 5200-A, subsection 1, paragraph M; and section 5200-A, subsection 2, paragraph L apply to tax years beginning or ending in 2001 and to carry-back and carry-forward tax years affected by those sections. That section of this Part that repeals and replaces Title 36, section 5203-A, subsection 1, paragraph A applies to tax years beginning on or after January 1, 2002, and to prior tax years affected by Title 36, section 5122, subsection 1, paragraph M; section 5122, subsection 2, paragraph P; section 5200-A, subsection 1, paragraph M; and section 5200-A, subsection 2, paragraph L, to the extent that those provisions of law affect section 5203-A, subsection 1, paragraph A.
| Revisor of Statutes Homepage | Subject Index | Search | 120th Laws of Maine | Maine Legislature |
