Maine LD856 proposes to phase out the state income tax over several years, reducing tax rates and eventually eliminating the tax by 2030.
Maine LD856 phases out the state income tax by gradually reducing tax rates starting in 2026. For tax years beginning in 2026, the tax is reduced by 20%, 40% in 2027, 60% in 2028, and 80% in 2029. The tax is completely eliminated starting January 1, 2030. The bill also mandates that state department budgets be reduced proportionally to the reduction in revenue. The Department of Administrative and Financial Services, Bureau of the Budget must ensure these budget reductions.
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