Senator Cushing Seeks to Eliminate Personal Property Tax in Maine

Contact:
Krysta West
Communications Director
Senate Republican Office
(207) 287-1505
krysta.west@legislature.maine.gov

FOR IMMEDIATE RELEASE

AUGUSTA – On Wednesday, April 26 Assistant Senate Majority Leader Andre Cushing (R-Penobscot) presented legislation before the Legislature’s Taxation Committee to eliminate personal property tax in Maine.

As the title indicates – LD 1172, “An Act To Repeal the Maine Personal Property Tax” – would end the assessment and collection of taxes on non-real estate property and assessed personal property, including machinery, in the same manner as other property.

The personal property tax law currently exempts “all items of individually owned personal property with a just value of less than $1,000, except … Items used for industrial or commercial purposes.”  This means if a business owner buys a coat rack and puts it in the office of the business, it is taxed; but that same coat rack in the hallway of a residence is not taxed. A table saw used by a home hobbyist is not taxed, but an identical saw used by a cabinet maker is taxed.

There is a considerable amount of equipment and machinery involved in earning a living in farming, forestry or other small businesses, and often times, the amount of personal property held by a business or farm is not as much an indication of potential earning as it is of debt load.

“Perhaps one of the greatest problems with the personal property tax is that there is little, if any, consistency in the way the tax is assessed from town to town. There is no way for the state to regulate or assure fairness. While smaller towns must rely on the accuracy of the self-reporting by the taxpayers, larger municipalities have staff in their offices that do this for their full-time jobs. There are also many towns across the state that see the process as too burdensome to even bother with and violate the law by not taxing any personal property,” said Sen. Cushing.

“The end result of this law is that many small businesses are being unfairly impacted by a law that is not fairly assessed across the board and not representative of the wealth or profit of the business. That’s why this is an important step in the Legislature’s goal of crafting a tax policy which is not only fair and equitable but also not overly burdensome to either those who assess and collect it or those who pay it”

A work session has not yet been scheduled for LD 1172.

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