Maine Amends New Markets Capital Investment Credit

Maine excluded investments that are used to cover “one-day loan” payments from the new markets capital investment credit. The credit can be taken against income and insurance premium taxes. This legislation essentially codifies a Finance Authority of Maine (FAME) regulation.

Credit No Longer Allowed for Certain Investments

Specifically, legislation amends the definition of “qualified low-income community investment” to exclude a capital or equity investment if:

  • it was made after November 9, 2015; and
  • more than 5% of the investment is used for certain purposes.

Those purposes include:

  • refinancing costs, expenses, or other investments by a qualified active low-income community business (or related party) before the date of the investment;
  • making equity distributions from a qualified active low-income community business to its owners;
  • acquiring an existing business or enterprise in Maine; or
  • paying transaction fees.

The legislation making the change was enacted without the governor’s signature.

L.D. 1796 (H.P. 1240), Laws 2018, effective 90 days after adjournment of legislative session

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All stories by: CCHTaxGroup