AUGUSTA, Maine — The Maine Center for Economic Policy (MECEP) applauds the Legislature’s Taxation Committee for advancing efforts to stop corporations from exploiting a loophole to lower their US profits on paper and avoid paying Maine income taxes.
“When Maine communities thrive, so do the corporations that do business here,” said Sarah Austin, MECEP director of policy and research. “But when profitable corporations build their wealth by manipulating the tax code and hiding their profits to avoid paying taxes, it is workers, small businesses, and our communities — not CEOs or shareholders — who are harmed.”
Huge, multinational corporations such as Apple, Pfizer, ExxonMobil and Google, use offshore tax havens to avoid paying taxes on billions of dollars of profits every year. These corporations benefit from Maine’s public investments but aren’t paying their fair share in taxes to support the public services that make Maine a good place to do business. Corporations exploit the tax havens loophole to avoid up to $52 million of Maine taxes annually, according to a 2020 report by MECEP.
LD 428, An Act To Prevent Tax Haven Abuse will take steps toward deploying ‘worldwide combined reporting’ as a method to require corporations and their subsidiaries to report global profits and pay taxes based on the portion of their business that is done in Maine.
“Each year, Maine is losing up to $52 million as a result of tax haven abuse — revenue that could be recouped if tax haven loopholes were closed,” said Austin. “By cleaning up loopholes in the corporate tax code that help corporations hide their US profits offshore, Maine can level the playing field for Main Street businesses and raise revenues that provide critical resources for workers and families throughout the state.”