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April 25, 2014
Maine Lawmakers Send Tax Havens Bill to Governor
by Douglas Rooks

Full Text Published by Tax Analysts®

Lawmakers gave final approval on April 16 to a bill (LD 1120) that would make Maine the third state to list specific foreign countries as tax havens where multinational companies are offshoring profits and require companies to report income from those countries.
LD 1120, sponsored by Rep. Adam Goode (D), had been waiting on the Joint Appropriations and Financial Affairs Committee's special appropriations table for funding until the session's waning days. Lawmakers expect to adjourn in the early morning on April 18.

Under LD 1120, corporations would have to report income from a list of 38 identified offshore tax havens. The bill is expected to generate an additional $10 million per biennium, but because it also required an appropriation of $265,000 for new staffing at Maine Revenue Services, it needed the committee's review before enactment.

Both the House and Senate gave final approval by voice vote; the only roll call on the bill came in the House on April 4, when it was supported 81 to 52 with 18 members absent.

The voting pattern suggested that the bill might not survive a veto by Gov. Paul LePage (R), but to date the governor's position on the bill is unknown.

Democratic supporters held a press conference last week to rally support for the bill, and after passage they continued the campaign.

"Democrats are calling on the governor to do the right thing for Maine businesses and taxpayers," said Goode, who co-chairs the Joint Taxation Committee. In a statement, he called on LePage to "sign this bill, close loopholes exploited by huge multinational corporations, and stop tax evasion that puts our small businesses at a competitive disadvantage."

House Majority Leader Seth Berry (D) asked, "What's the priority? Is Maine open for businesses that cheat Maine taxpayers and closed for businesses that pay their fair share?"

Berry asked whether the governor "will choose Liechtenstein or Livermore Falls? The Kingdom of Bahrain or Kennebunk? Luxembourg or Lewiston? Monaco or Millinocket?"

Livermore Falls happens to be the home of Rep. Gary Knight (R), the current ranking minority member on the Taxation Committee, who led opposition to the bill in committee and on the House floor.

Berry noted the experience of Oregon and Montana, which already have similar laws in place. Montana collected more than $7 million in 2010 from five tax havens, and Oregon expects to see $18 million annually, he said.

LePage will have 10 days to sign, veto, or allow to become law without his signature more than 50 bills enacted in the session's final days. Lawmakers expect to return in two weeks to consider any vetoes.

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