The Legislature’s Appropriations and Financial Affairs Committee endorsed a supplemental budget on an 8-5 party-line vote Thursday night that would give Maine businesses and unemployed Mainers a break from paying taxes on relief funds they received during the COVID-19 pandemic.

Democrats and Republicans agreed to fully conform with the federal tax code so that more than 28,000 businesses would not pay state taxes on the Paycheck Protection Loans they received, a provision that would cost the state $100 million in tax revenue.

The supplemental budget also includes $47 million to exempt unemployment benefits from state income taxes and $30 million in state and federal funds to provide relief to direct care workers and nonprofits.

The parties couldn’t agree, however, on a Republican demand for two-thirds votes in each chamber on how to spend more aid likely to come soon from Congress.

Republicans predicted the spending plan wouldn’t receive the two-thirds support it needs to pass when it goes before the full Legislature for consideration at the Augusta Civic Center next week.


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