Maine working to prevent federal tax overhaul from increasing state taxes

https://www.pressherald.com/2018/02/01/maine-lawmakers-work-to-ensure-federal-tax-overhaul-wont-lead-to-hike-in-state-income-tax-bills/

AUGUSTA — Maine lawmakers on Thursday began trying to figure out how to ensure Mainers aren’t hit with a higher state tax bill because of the Republican tax overhaul that President Trump recently signed into law.

Gov. Paul LePage’s administration said the governor plans to submit legislation this month aimed at preventing a state tax hike that could occur if Maine does away with its personal exemption on income taxes to conform with that change in federal tax law. For the 2017 tax year, Maine’s personal exemption was $4,050, the same as the federal exemption.

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The LePage administration’s new report finds Maine residents and businesses overall could see $1 billion in federal income tax cuts under the overhaul.

But the report also finds that repealing Maine’s personal exemption could contribute to a state tax increase of $250 million annually. Lower- and middle-income Mainers would be hit particularly hard by state tax increases, according to the Maine Revenue Services report.

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