An Act To Support Maine Businesses By Establishing A Pass-Through Entity Tax And Tax Credit

LD 191 establishes a new tax for Maine-based partnerships and S corporations (pass-through entities) starting in 2025. It requires these businesses to calculate a tax based on each owner's share of Maine income using the highest individual income tax rate, then pay that tax directly. Owners of these businesses receive a 90% credit against their personal Maine income tax for the amount paid, with excess credits refunded. The bill does not change how businesses are taxed overall but shifts the payment mechanism from owners paying directly to the business handling the tax and distributing the credit. It applies to all qualifying Maine pass-through entities with income sourced in Maine.