When corporations don’t pay what they owe in taxes, Maine people, communities, and small businesses end up footing the bill. As Maine Center for Economic Policy has previously written, when corporations receive lucrative tax breaks and fail to pay their fair share in taxes, they profit from the hard work of Mainers and exploit the resources in our communities while shortchanging our prosperity.
Maine will have an opportunity this legislative session to finally bring shady corporate tax avoidance into the daylight. LD 1337, An Act to Require a Corporation That Files a Tax Return in the State to File a Tax Disclosure Statement, sponsored by Rep. Ann Matlack, would require corporations to file an annual statement disclosing the amount they pay in state income taxes and the amount they receive in state subsidies.
Corporations are already required by law to include profit and loss information in their annual securities and exchange commission filings to be transparent to investors, but they aren’t required to report the same information at the state level. This means shareholders can gauge the financial health of a company before they invest in it, but the same opportunity is not afforded to Maine taxpayers who subsidize businesses with their tax dollars.
Maine gives away over a billion dollars in tax breaks to businesses every year. Some of these tax breaks are refundable, meaning the state not only lowers businesses’ taxes but may also cut them a check — just like when an individual gets a tax refund after filing their income taxes, except to the tune of millions of dollars. There’s no way of knowing how much Maine cuts in checks to wealthy, out-of-state corporations that don’t pay taxes here, because that data isn’t collected. By requiring corporations to file an annual income tax disclosure, Maine can find out who is contributing their fair share and who is not.
The revenue that comes from taxes supports things we all need, including the roads, ports, infrastructure, and educated workforce corporations rely on. Hardworking Mainers shouldn’t have to foot the bill for corporations that use complex tax schemes to avoid paying what they owe. Mainers deserve corporate tax transparency, and MECEP urges the legislature to require corporate income tax disclosure.