AUGUSTA — Maine lawmakers on Thursday began trying to figure out how to ensure Mainers aren’t hit with a higher state tax bill because of the Republican tax overhaul that President Trump recently signed into law.

Gov. Paul LePage’s administration said the governor plans to submit legislation this month aimed at preventing a state tax hike that could occur if Maine does away with its personal exemption on income taxes to conform with that change in federal tax law. For the 2017 tax year, Maine’s personal exemption was $4,050, the same as the federal exemption.

“He would not support tax conformity changes that increase the income tax burden on Maine citizens,” Maine Department of Administrative and Financial Services Commissioner Alec Porteous told lawmakers at a joint legislative committee hearing.

Maine joins states around the country that are considering how and whether they will change their tax laws in response to federal tax reform. The new federal tax law cuts tax rates and nearly doubles the standard income deduction. It also caps or eliminates some popular itemized deductions and eliminates the personal exemption.

The LePage administration’s new report finds Maine residents and businesses overall could see $1 billion in federal income tax cuts under the overhaul.

But the report also finds that repealing Maine’s personal exemption could contribute to a state tax increase of $250 million annually. Lower- and middle-income Mainers would be hit particularly hard by state tax increases, according to the Maine Revenue Services report.

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With lawmakers still at work, it’s unclear whether the same Mainers who would see a federal tax cut would see their state taxes increase.

LePage hasn’t released details of his proposal yet, but Porteous said it’s possible Maine could keep the personal exemption in some form.

Lawmakers should work to make sure Mainers don’t see a state tax hike, said Rep. Denise Tepler, who sits on the Legislature’s committees on taxation and appropriations and financial affairs.

“I want to make sure the burden is distributed equitably if there is going to be any increased burden,” Tepler added.


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