Tax conformity
Before I dive into legislative matters, I would like to start by saying that I hope you are all enjoying your summers and making the most of what Vacationland has to offer. Although this has been an extremely humid summer, it’s hard to believe that we are already well into fair season with the Union and Windsor Fairs just around the corner.
It’s also hard to believe that the federal government passed a sweeping overhaul of the tax code last December and our bill to conform Maine’s tax code is still sitting on the table in the House of Representatives, held hostage as a political football.
We all know that businesses perform best under a predictable regulatory environment. That’s why I worked so hard as Chair of the Taxation Committee to draft legislation that garnered bipartisan support to conform our tax code in a way that wouldn’t raise taxes or require Maine taxpayers to navigate multiple layers of bureaucracy just to comply.
Senate Republicans have stated from day one of this session that tax conformity is a top priority, and we worked hard to get a compromise bill before the Senate for a unanimous vote two months ago.
On July 31, the Department of Administrative and Financial Services issued a letter to the 128th Legislature stressing the importance of passing LD 1655, my tax conformity bill. In the letter it said, “…failing to conform would add considerable time, cost and administrative burden for Maine families and businesses that would need to comply with, and plan for, different state and federal tax laws.”
The letter went on to say that if we fail to enact conformity legislation, the Maine Revenue Services would need to hire 26 new positions and upgrade their tax collection systems, which would cost $5.8 million initially and $2.3 million each year following.
The state tax form would also become far more cumbersome with an additional 186 lines added to the form.
Additionally, they reported that, “…numerous Maine taxpayers would need to file amended 2017 income tax returns. MRS had delayed pursuing this requirement in the hope that the Legislature would act on conformity. But the bureau needs to act responsibly to administer Maine’s tax laws and cannot continue to delay indefinitely. To that end, earlier this month, Maine Revenue Service (MRS) issued a tax alert advising affected taxpayers to prepare amended 2017 income tax returns for filing on or before October 15, 2018.”
Passing tax conformity isn’t a political matter; it’s a matter of responsible governance. The House has a bill that received unanimous support in the Senate before them. Members from both bodies and parties were intimately involved in its drafting.
I understand that the highly-politicized (in the House) Maine Clean Elections errors bill is important to House Democrats, particularly because I have chosen to use the program myself. But tax conformity has absolutely nothing to do with Maine Clean Elections, and Maine taxpayers will soon pay a dear price for the House’s inaction on this matter.
I sincerely hope that cooler heads will soon prevail so we can finally enact what I consider to be the most important legislation of this year.
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