LD1564 Good for Maine Biz

Saturday, January 23, 2016 @ 9am

Download  Entire Hour Here | Download Linda’s Audio

Urge Your Legislator to VOTE Ought to Pass As Amended on L.D. 1564

Caprara_Linda1
Guest: Linda Caprara
Senior Government Affairs
Specialist in Taxation

Director of Grassroots Advocacy
Maine State Chamber of Commerce

If you cannot make it to Augusta send your testimony to the Taxation Committee.

linda.leet@legislature.maine.gov

L.D. 1564, “An Act to Update References to the United States Internal Revenue Code of 1986 contained in the Maine Revised Statutes (Emergency)”, Sponsor Senator Earle McCormick. (As amended)

Keep Maine Businesses Competitive

  • Congress passed the PATH Act in December 2015 which among various tax changes, made the current Section 179 deduction limits permanent and extended federal bonus depreciation through 2019.
  • Congress recently extended Federal bonus depreciation through 2019 (50% for property placed in service from 2015 through 2017, 40% for 2018, and 30% for 2019).  In addition, Congress also made permanent the higher limits for Section 179 expensing.  The limit is now $500,000 (back to the 2013 limit).  To see the bill language please click on this link: http://mainelegislature.org/LawMakerWeb/summary.asp?ID=280059088
  • Conforming to both the high Section 179 expensing limits and the federal bonus depreciation via the Maine Capital Investment Credit is absolutely imperative to keep Maine competitive.  If Maine chooses not to conform, Maine will be at a competitive disadvantage with other states that do adopt higher Section 179 expensing limitations and federal bonus depreciation deductions.
  • Congress increased the Section 179 limitation from $25,000 to $500,000 in 2010-2013 in a successful effort to stimulate investment and to grow the United States economy and increase jobs.  If Maine does not adopt the higher Section 179 limitations, Maine businesses would be subject to a $25,000 limitation versus businesses in states that do conform, which would be subject to a $500,000 limitation. Companies in other states would be incentivized to expand and purchase new equipment in those states because they would be able to currently deduct the costs (as opposed to deducting them over several years).  This is especially important to Maine’s small businesses.
  • In a year when business expenses are high (when companies want to expand and purchase new equipment, start up a business or just need to update existing equipment to remain competitive), the immediate cash savings Section 179 offers is critical for cash flow purposes.  It allows businesses to expense both new and used tangible personal property immediately, thereby freeing up cash, allowing the business to grow and hire employees.
  • The purpose of bonus depreciation is to encourage companies to invest by allowing them to take accelerated depreciation on new equipment, thereby stimulating the economy and creating jobs.  By conforming to bonus depreciation through the Capital Investment Credit, bonus depreciation is only given for property used in Maine.  If Maine does not conform to bonus depreciation through the Capital Investment Credit, this will no doubt place Maine companies at a competitive disadvantage compared to companies that operate in states that offer that accelerated depreciation and the competitive advantage it provides.

Urge Your Legislator to VOTE Ought to Pass As Amended on L.D. 1564

Linda joined the Maine State Chamber of Commerce in January 2008, and serves as the Senior Government Relations Specialist in Taxation and the Director of Grassroots Advocacy. Previously, she held the position of director of Government and Public Affairs at the Maine Pulp and Paper

She is a graduate of Saint Anselm College, with a Bachelor’s degree in Sociology. Linda attended Central Connecticut State University for additional studies in taxation and accounting and is a graduate of Connecticut School of Broadcasting.