STATEMENT: Amended tax havens bill would close corporate tax loophole handed down by Trump Tax Cuts

February 19, 2020

AUGUSTA, Maine — Sarah Austin, tax and budget policy analyst at Maine Center for Economic Policy, released the following statement regarding the Taxation Committee’s approval of an amended version of LD 403.

“This bill, as amended, will eliminate from Maine’s tax code a roughly $10 million tax break that rewards corporations for moving capital assets overseas. Proponents of this tax break said it would reduce offshore tax haven abuse, but study after study have proven it to be a failure. Instead of closing that loophole, it created a new one. Just because the federal tax code rewards bad behavior by corporations doesn’t mean Maine’s has to. LD 403 would help clean up Maine’s tax code, and MECEP urges the Legislature to approve it.”

The bill, sponsored by Taxation Committee Co-Chair Rep. Ryan Tipping of Orono, would decouple Maine’s tax code from the federal “foreign-derived intangible income deduction,” or FDII. The deduction was created by the 2017 Trump Tax Cuts. The Maine Legislature adopted the tax break for corporations when it enacted a tax conformity package in 2018.

If approved by the Legislature, the bill would remove the deduction from Maine’s tax code.

For more information, see MECEP’s testimony on LD 403. To request an interview with Austin, contact MECEP at the information below.

Mario Moretto
(207) 620-1101