Tim Brooks, Integra Strategic Technologies
State Incentives
Maine Incentives for Business
Maine's business incentive programs are creating substantial new investments. Here is an overview of a few of the programs and incentives available to Maine businesses.
For more information on any of these, or other programs, contact the Office of Business Development by sending an e-mail to biz.growth@maine.gov.
This new program makes doing business in Maine a very smart move. In addition to existing incentive programs, such as business equipment tax reimbursement, job training, and financing programs Maine offers, to qualified new and expanding businesses:
- 80% ETIF (Employment Tax Increment Financing) for ten years;
- A 100% refund of corporate income tax and insurance premium tax for years one through five, and 50% for years six through ten;
- A local option TIF (Tax Increment Financing) that will not be counted against a municipality’s existing TIF area and value caps; and
- (Effective July 1, 2005) A 100% sales and use tax exemption for zone-related construction materials and equipment purchases.
Employment Tax Increment Financing (ETIF)
This program returns between 30 and 75 percent of new employees' income withholding tax to companies who add new workers. To qualify, employees must be paid a wage equal to or above the per capita wage in their labor market area, and be provided group health insurance and access to an ERISA qualified retirement program. The company must also demonstrate that ETIF funding is an essential component of the expansion project's financing.
Business Property Tax Reimbursement Program
Maine reimburses what companies pay in local property taxes on facilities built after April 1, 1995. Taxes on this property may be reimbursed by the state for a maximum of 12 years. The definition of qualified business property for this program is broad and specified by law.
Jobs and Investment Tax Credit
This program helps businesses with an income tax credit on equipment and facilities that generate new jobs. The program provides a 10 percent credit against Maine income taxes for investment in most types of personal property that generates at least 100 new jobs within two years, as long as the investment is at least $5 million for the taxable year. The credit amount is tied to the federal investment tax credit and is limited to $500,000 per year with carry-forwards available for seven years.
Research and Development Tax Credit
Maine’s R&D tax credit provides an income tax credit for qualifying research and development activities. The program is based on definitions within the Internal Revenue Code; therefore, Maine’s Bureau of Taxation recommends a careful study of Section 41 of the Code. In general, qualified research expenses include in-house and contract research related to discovering information that is technological in nature and is intended for use in developing a new or improved business.
R & D "Super Credit"
A "super credit" for substantially increased research and development investments has been established in addition to the previously listed R&D tax credit, and it is possible that a business may qualify for both credits. A business qualifying for the existing research expense credit is allowed an additional credit against the tax due equal to the excess, if any, of qualified research expenses for the taxable year over the "super credit base amount." The "super credit base amount" is the average amount spent on qualified research expenses by the taxpayer in the three taxable years immediately preceding the effective date of the super credit, increased by 50%.
Under this program, machinery and equipment used directly or primarily in production or exclusively in research and development will be exempt from the 5 percent sales and use tax. The program also exempts consumable and repair/replacement parts used in production and provides a sales tax exemption for 95 percent of all fuel and electricity purchased for use in manufacturing. This program also exempts from sales tax the purchase of custom computer programming. If a standard program were purchased then customized, the cost of the standard program would be taxable and the customizing, if separately stated, would be nontaxable.
High Technology Investment Tax Credit
The high technology investment tax credit rewards eligible high tech firms for investments in a range of computers and related equipment. The credit applies to purchases or leases of computer equipment, electronics components, communications equipment and computer software placed in service in the state. Only firms engaged in a "high technology activity" may claim the credit. Businesses eligible for the credit include those that design, create or produce computer software, computer equipment, supporting communications components and certain other computer accessories. Businesses that provide Internet or e-communications access services, support access to electronic media, data and associated communications support, or advanced telecommunications capabilities also qualify.
Maine Seed Capital Tax Credit Program
This program is designed to encourage equity and near equity investments in young business ventures, directly and through private venture capital funds. State income tax credits to investors for up to 60% of the cash equity they provide to eligible Maine businesses may be authorized. Investments may be used for fixed assets, research or working capital.
Tax Increment Financing (TIF) Districts
Municipalities can use Tax Increment Financing as an economic development incentive within their community. The program enables a municipality to designate a TIF District in which new or expanding businesses can receive financial support based on the new property tax revenues generated by their project. The municipality may choose to fund a portion of the project improvements or to return a percentage of the tax revenues to the company to offset the costs of development.
Maine Technology Institute
The Maine Technology Institute exists to encourage, promote, stimulate and support research and development activity leading to commercialization of new products and services in the State's technology intensive sectors Maine private companies and non profit organizations whose efforts are in the targeted technology area of information technology, aquaculture & marine, advanced technologies for forestry & agriculture, biotechnology, composite materials, environmental and precision manufacturing.
Development Fund
The Development Fund provides funding to communities that in turn loan to businesses for the purpose of acquisition, relocation, demolition, clearance, construction, reconstruction, installation, rehabilitation and working capital. Funded by federal money through the Community Development Block Grant Program, this fund assists projects that represent new economic initiatives and development opportunities that will create or retain jobs.
Business Assistance Program
Funded by federal money through the Community Development Block Grant Program, the Business Assistance Program (BAP) provides funding to communities, to loan, grant or a combination of each, to business entities to meet the infrastructure, capital equipment and real property needs of businesses. Assistance to help you do business in Maine.
Maine Business Programs
Maine is an entrepreneurial state where small businesses thrive and new business start-ups are widespread. The state's many small business initiatives are designed to help these dynamic companies get the support and services they need to succeed. Check out the TechMaine Online Support if you are looking for examples of sample business, marketing or Web strategy plans.
Small Business Development Centers
The Maine SBDC's provide comprehensive business assistance and information services to the small business community. The focus of SBDC services is to strengthen Maine's economy by helping small businesses grow and develop.
Business Answers
Maine's toll-free business information hot line provides rapid responses to questions about doing business in Maine. Business Answers supplies accurate and timely answers to questions about labor, regulations, taxes and financing and maintains a network of contacts in other state and quasi-public agencies. Also available through Business Answers are a Business Start-Up Kit, customized packets offering information about self-employment, hiring employees and labor standards, and a Guide to Doing Business in Maine (1-800-872-3838 in-state and 1-800-541-5872 from outside Maine). Through the Business Answers hotline, callers may request business license and permit applications as well information on state regulations through the One-Stop Business License Center. This central clearinghouse for state regulatory information helps simplify the process of complying with state business regulations. The Small Business Advocate service is available to help small businesses resolve problems they may be experiencing with state regulatory agencies.
Maine Business Resource Guide
A, free (PDF file), comprehensive guide to the extensive resources available to Maine businesses. This guide provides specific information about the most frequently used programs, charts that summarize key components of each program and lists of organizations that offer additional business services – how to do business in Maine.
Maine Products Marketing Program
This program provides marketing assistance to producers of Maine-made consumer goods. Members of the program promote their message of Maine quality with product tags and labels, literature and package design, which carry the unified theme, "Maine Made - America's Best." The program also publishes the "Maine Made" Buyer's Guide, which is sent to more than 25,000 wholesale buyers.