Tax Credits offered by the State of Maine are primarily designed to encourage the growth of technology companies.
High-Technology Investment Tax Credit is for high-tech activities including the design, creation, and production of computer software, computer equipment, supporting communications components and other accessories that are directly associated with computer software equipment. The credit amount is based on the adjusted basis of eligible equipment that is purchased or leased. There are two limitations on the application of this credit (1) it cannot reduce the tax to an amount below the previous year’s tax after credits, (2) it cannot be carried back, but can be carried forward for up to five years. This credit cannot be used in tandem with BETR.
Jobs and Investment Tax Credit allows any business, other than a public utility, that invests at least $5 million in a taxable year in qualifying types of personal property and creates 100 new jobs in Maine within the ensuing two-year period a tax credit equal to 10% of the qualified investment. The credit is limited, in any one year, to the lesser of $500,000 or to the income tax otherwise due. The credit amount may not be carried back, but can be carried forward up to seven years. The Jobs and Investment Tax Credit may not be taken concurrently with the Employment Tax Increment Financing Program. The terms and conditions for qualified new jobs are the same as for the ETIF.
Research Expense Tax Credit is based on a percentage of the federal credit for increasing research activities. The credit is limited to 5% of the excess qualified research expenses over the previous three-year average plus 7.5% of the basic research payments under IRC regulations. The credit is further limited to 100% of the first $25,000 in tax liability plus 75% of the tax liability in excess of $25,000. The credit cannot be carried back, but can be carried forward for up to 15 years.
Super Research and Development Tax Credit benefits businesses that qualify for the research expense credit and whose qualified research expenses conducted in Maine for the taxable year exceed 150% of the average research expenses for the three taxable years prior to September 1997. The credit is limited to 50% of the tax otherwise due after all the previous year credit. The credit cannot be carried back, but can be carried forward for up to five years.
Maine Seed Capital Tax Credit encourages equity investment in young business ventures, directly and through private venture capital funds. Tax credits are authorized by FAME to investors for up to 60% of the cash equity they provide to eligible Maine businesses. Investments may be used for fixed assets, research or working capital.
Finance Authority of Maine
207-623-3263 or 1-800-228-3734