AUGUSTA – A bill to prevent multinational corporations from using offshore tax havens to evade taxes in Maine won the House’s initial support with a vote of 86-58 on Tuesday.
LD 1120, An Act To Improve Maine’s Tax Laws, would prevent multinational corporations from dodging taxes in Maine by using accounting tricks that make it seem as though the income was generated elsewhere. Under the measure, corporations would have to report income from a list of 38 known offshore tax havens, including Bermuda, the Cayman Islands and Luxemburg.
Maine would see an additional $10 million each two-year budget period, according to the fiscal note on the bill prepared by Maine Revenue Services.
“Maine is losing out on $10 million for each budget because of multinational corporate loopholes,” said Rep. Adam Goode, D-Bangor, the bill’s sponsor and House chair of the Taxation Committee. “This is $10 million we could use for budget priorities ranging from revenue sharing to the property tax fairness credit and from Head Start to Clean Elections.”
States lose an estimated $20 billion annually because of corporate use of offshore tax havens. Montana, Oregon, Alaska and West Virginia already have adopted practices like those in LD 1120, and other states are considering similar proposals.
“Large corporations are using tax code loopholes uncovered by their lawyers and accountants to avoid reporting revenue from Maine. At a time when we are scraping the bottom of every barrel for possible revenue and cutting important programs, why aren’t we doing everything in our power to keep Maine revenue in Maine? ” said Rep. Ryan Tipping-Spitz, D-Orono, a member of the Taxation Committee. “We need to level the playing field for Maine businesses and stop asking them to pick up the tab for these corporations.”
Maine already has domestic tax evasion checks in place to prevent corporations from hiding money in states like Delaware and Nevada.
The bill faces further action in the House and Senate.