Content from "Maine Gears Up for a Serious Tax Reform Conversation" By Jared Walczak, Scott Drenkard
Property Taxes
Maine's Proposed real and personal property tax reforms would improve the state’s ranking from 40th to 35th on property taxes in our Index.
Estate Taxes
The LePage plan phases out and ultimately repeals the estate tax, raising the exemption from $2 million to $5.5 million in 2016 and repealing the tax entirely for deaths on or after January 1, 2017. This change would follow the trend of many states turning away from death taxes in recent years.
Real Property
The LePage plan proposes the doubling of the homestead exemption (to $20,000) for senior citizens and its elimination for taxpayers under age 65. It also halves the current 100 percent exemption above a $500,000 exemption for the real property of nonprofit organizations, with the exception of houses of worship, the property of which would remain fully tax-exempt. The proposed reduction in the exemption percentage is expected to generate at least $60 million in annual revenue to localities, modestly offsetting a proposed phase-out of state revenue sharing with localities, which will have a local impact of more than $164 million a year by the FY 2018–2019 biennium.
Most states do not levy property taxes on nonprofit organizations, though some are increasingly turning to negotiated payments in lieu of taxes for certain nonprofits.[4] There is, moreover, no uniformity on the subject: Virginia allows localities to decide whether to impose property taxes on nonprofits, while the District of Columbia restricts the exemption to nonprofits focused on public charity principally in the District.
The LePage plan also makes modifications to the Property Tax Fairness Credit, which caps property taxes for low-income and middle-income families. The plans would make more property owners eligible for relief, though the amount at which property taxes are capped will be higher, as seen in Table 4.
To read the original article this information is cited from please visit the link below:
http://taxfoundation.org/article/maine-gears-serious-tax-reform-conversation