What Are Everyday Mainers Saying About Tax Conformity?

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For Immediate Release: Friday, January 29, 2016
Contact: David Heidrich, (207) 624-7453
Director of Communications, DAFS

What Are Everyday Mainers Saying About Tax Conformity? 
Taxation Committee to hold second work session on February 1.

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AUGUSTA – On Monday, February 1, 2016, the Maine Legislature’s Joint Standing Committee on Taxation will conduct its second work session on LD 1564, the Department of Administrative and Financial Services’ legislation to conform Maine’s tax code to the federal Internal Revenue Code. Earlier this week, nearly two dozen individuals – representing themselves, small businesses, family farms, or trade organizations – testified in support of the Department’s legislation.

Since some representatives, such as Rep. Adam Goode (D-Bangor) and Rep. Diane Russell (D-Portland), were not present to receive testimony from the public, DAFS has compiled a brief summary of the statements made by Maine’s business community at the committee’s public hearing.

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David Barber, Barber Foods – Portland
“As a capital intensive business, we invest millions into the facility in Portland each year to stay ahead of advancing technology so that we are at the cutting edge rather than lagging in this important area. … In all cases, these investments keep us competitive in the brutally competitive food industry.”

“I want to make sure that Maine makes it easy to continue to make these investments, get the maximum benefit possible and keep it simple to evaluate the tax implications by conforming to the Federal regulations.”

Tim Walton, Cianbro – Pittsfield
“This legislation would incentivize existing businesses to make new investments in machinery, equipment and technology and would attract new business and development here in Maine when compared to other locations. This bill is certain to have a significant and positive impact on Maine's economy.”

Ryan Crane, Crane Brothers Farm – Exeter
“Cash flow budgeting and cash flow management is really important to our farm business. Knowing ahead of time what some of our tax implications will be throughout the year can really help us manage that cash flow and understand where we need to position our business.”

“Other parts of the country have some pretty distinct advantages when it comes to growing crops. … So any type of advantage we can gain in Maine to position ourselves close to on par with our competitors across the country and across the world is important.”

Derek Volk, Volk Packaging – Biddeford
“The passage of LD 1564 within the state of Maine is a win-win for both Maine businesses and the state, and thereby, the people of Maine. It gives businesses the available capital at the right time to make smart decisions rather than delaying the capital and the opportunities available to them. … The state loses nothing in the transaction since the taxes are simply delayed, not forgiven.”

Gary Hammond, Hammond Tractor – Fairfield
“A realistic amount of known depreciation is key in long-term planning and capital asset acquisition. It’s important to my small business, my fellow small business owners, and mostly to our customers.”

“[Our customers] ought to be able to plan and know what their expense and depreciation allowances are as incentives to them. Every year we get to December with the unknown. This year we had two or three good, key customers - dairy farmers in Maine - that would have liked to have made an acquisition at the end of the year, but we could not respond.”

Sheena Curtis, BerryDunn – Portland
“As each state considers how it will handle these provisions, Maine’s conformity supports Maine-based business and operations by providing a level, or even advantageous, playing field in comparison to neighboring states. Conformity with the federal section 179 rules help companies doing business in Maine to remain competitive, and the Maine Capital Investment Credit provides great incentive for in-state investment.”

John Babb, J&S Oil – Manchester
“Just over the past five years, we have invested over $7.1 million in capital additions that qualify for the Section 179 deduction or accelerated Bonus Depreciation. Of the $7.1 million that qualified for Section 179 and 50% Bonus Depreciation we were able to write off just over $4.4 million in the year that the additions were put into service. This equates to a Maine tax savings of just under $400,000 over that five-year period. This tax benefit would have been spread out over up to 15 years without Maine's conformity to the IRS tax code.”

Craig Guerette, Reed & Reed – Woolwich
“Business owners and decision makers, absolutely, take accelerated depreciation into consideration when making purchasing decisions.”

Ray Boshold, Maine Woolens – Brunswick
“Both the extension of Section 179 and bonus depreciation would greatly support our business and would assist us in our efforts to compete with the likes of countries like China and India.”

“…These extensions would certainly help us and give us more confidence as to what we can plan on and invest going forward.”

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