A bipartisan group of 11 legislators, who’ve been tagged the “Gang of 11,” unveiled sweeping tax changes Wednesday that they say could close the budget gap in the state’s next two-year budget plan.
The Portland Press Herald reported the plan would, generally, lower state income tax and raise sales and excise taxes.
A concept draft of the bill released Wednesday outlines the following changes, among others:
- Reduce corporate income tax to 3.5% on income up to $50,000 and 7.5% on income over that amount. Corporate income tax is now nearly 9%.
- Repeal the state’s estate tax.
- Expand the sales tax to include all consumer purchases except for health care and education purchases.
- Increase the general sales tax rate and service provider tax rate from 5% to 6%.
- Increase taxes on lodging from 7% to 8%, adding another 2% to be set aside for a tourism promotion fund.
- Move the real estate transfer tax from 0.44% to a progressive structure, with transactions at or below $250,000 taxed at 0.6% and transactions above $1 million taxed at 1.5% with graduated rates between.
- Increase the homestead property tax exemption from $10,000 to $50,000, which proponents of the bill say could reduce property taxes by around $500 for a majority of homeowners.
- Property tax exemptions for certain private nonprofit organizations at 100% for the first $250,000 in value and 75% for the portion exceeding $250,000.
