2009 News: Maine's Pine Tree Zones Expanded

PTZ benefits are now available to businesses anywhere in Maine (previously they were confined to designated areas). Potential savings include incremental increases in employer taxes and sales taxes on new equipment purchases. Businesses need to get their plans certified by the Department of Economic and Community Development and add one net new quality job within two years to qualify for benefits.

Process

Businesses that have expansion plans should contact the Department of Economic and Community Development to begin the application process. The process includes writing a letter, receiving an official response, preparing a plan, and having that plan certified. Upon certification, businesses qualify for available benefits, subject to annual filing requirements. Businesses must create one net new "quality" job within two years of certification ("quality" means meeting a gross income test and making certain benefits available).

Benefits

• Corporate Income Tax Credit: the tax credit benefit derives from net new PTDZ payroll and property as a percentage of all Maine payroll and property;

• Insurance Premiums Tax Credit: the tax credit benefit derives from net new PTDZ payroll and property as a percentage of all Maine payroll and property; (only applies to Financial Services sector)

• Income Tax Reimbursement: the tax reimbursement benefit derives from income taxes withheld for net new jobs created;

• Sales and Use Tax: paying no tax on all new tangible property purchases that are used in its qualified business activity;

• Access to reduced electricity rates

Advice

PTDZ benefits may be a good fit with businesses already planning an expansion, however the incremental tax savings may be minimal if the expansion does not add many employees or purchase much equipment. Applying for certification may be a lengthy, time-intensive process. At Yellis & Foley, we think this certification should be part of your overall tax strategy. Thus, in order to access benefits that exceed your costs, consultation with your CPA is essential.

More information on the state's website.