An Act to Create a Refundable Tax Credit for Agricultural Enterprises

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132nd MAINE LEGISLATURE
FIRST SPECIAL SESSION-2025
Legislative Document No. 1699
H.P. 1134 House of Representatives, April 17, 2025
An Act to Create a Refundable Tax Credit for Agricultural
Enterprises
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative PLUECKER of Warren.
Cosponsored by Senator TALBOT ROSS of Cumberland and
Representatives: COOPER of Windham, CRAY of Palmyra, DILL of Old Town, FROST of
Belgrade, GUERRETTE of Caribou, HEPLER of Woolwich, JACKSON of Oxford, Senator:
BLACK of Franklin.

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1Be it enacted by the People of the State of Maine as follows:
2Sec. 1. 10 MRSA §1100-T, sub-§2, as corrected by RR 2023, c. 2, Pt. C, §11, is
3 amended to read:
42. Eligibility for tax credit certificate for individuals and entities other than
5venture capital funds. The authority shall adopt rules in accordance with the Maine
6 Administrative Procedure Act, Title 5, chapter 375, to implement the program. Without
7 limitation, the requirements for eligibility for a tax credit certificate include the following.
8 A. For investments made in tax years beginning before January 1, 2012, a tax credit
9 certificate may be issued in an amount not more than 40% of the amount of cash
10 actually invested in an eligible Maine business in any calendar year or in an amount
11 not more than 60% of the amount of cash actually invested in any one calendar year in
12 an eligible Maine business located in a high-unemployment area, as determined by rule
13 by the authority. For investments made in tax years beginning on or after January 1,
14 2012, a tax credit certificate may be issued to an investor other than a private venture
15 capital fund in an amount not more than 60% of the amount of cash actually invested
16 in an eligible Maine business in any calendar year. For investments made in tax years
17 beginning on or after January 1, 2014, a tax credit certificate may be issued to an
18 investor other than a private venture capital fund in an amount not more than 50% of
19 the amount of cash actually invested in an eligible Maine business in any calendar year.
20 For investments made on or after April 1, 2020, a tax credit certificate may be issued
21 to an investor other than a private venture capital fund in an amount not more than 40%
22 of the amount of cash actually invested in an eligible Maine business in any calendar
23 year. For investments made on or after April 1, 2025, a tax credit certificate may be
24 issued to an investor other than a private venture capital fund in an amount not more
25 than 40% of the amount of cash actually invested in an agricultural enterprise in any
26 calendar year. Rules adopted pursuant to this section are routine technical rules as
27 defined in Title 5, chapter 375, subchapter 2‑A.
28 B. The Maine business or agricultural enterprise must be determined by the authority
29 to be a manufacturer or a value-added natural resource enterprise; must provide a
30 product or service that is sold or rendered, or is projected to be sold or rendered,
31 predominantly outside of the State, except that, for an agricultural enterprise, the
32 product or service may be sold inside or outside of the State; must be engaged in the
33 development or application of advanced technologies; or must be certified as a visual
34 media production company under Title 5, section 13090‑L. The business must shall
35 certify that the amount of the investment is necessary to allow the business to create or
36 retain jobs in the State. The agricultural enterprise shall certify that the amount of the
37 investment is necessary to allow the agricultural enterprise to expand its enterprise.
38 C. Aggregate investment eligible for tax credits may not be more than $5,000,000 for
39 any one business or agricultural enterprise as of the date of issuance of a tax credit
40 certificate. Beginning with investments made on or after April 1, 2020, aggregate
41 investment eligible for tax credits may not be more than $3,500,000 for any one
42 business as of the date of issuance of a tax credit certificate and not more than
43 $2,000,000 for any calendar year. Beginning with investments made on or after April
44 1, 2025, aggregate investment eligible for tax credits may not be more than $3,500,000
45 for any one agricultural enterprise as of the date of issuance of a tax credit certificate
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46 and not more than $2,000,000 for any calendar year. Notwithstanding the other
47 provisions of this paragraph, with respect to a business that was approved by the
48 authority as an eligible business under this subsection before April 1, 2020, the
49 aggregate investment eligible for tax credits may not be more than $5,000,000 for that
50 business as of the date of the issuance of the tax credit certificate, and the $2,000,000
51 annual limitation does not apply.
7 D. The investment with respect to which any individual is applying for a tax credit
8 certificate may not be more than an aggregate of $500,000 in any one business or
9 agricultural enterprise in any 3 consecutive calendar years, except that this paragraph
10 does not limit other investment by any applicant for which that applicant is not applying
11 for a tax credit certificate and except that, if the entity applying for a tax credit
12 certificate is a partnership, limited liability company, S corporation, nontaxable trust
13 or any other entity that is treated as a flow-through entity for tax purposes under the
14 federal Internal Revenue Code but not as a private venture capital fund, the aggregate
15 limit of $500,000 applies to each individual partner, member, stockholder, beneficiary
16 or equity owner of the entity and not to the entity itself.
17 E. For investments made in tax years beginning before January 1, 2014, the business
18 receiving the investment must have annual gross sales of $3,000,000 or less. For
19 investments made in tax years beginning on or after January 1, 2014, the business or
20 agricultural enterprise receiving the investment must have annual gross sales of
21 $5,000,000 or less. The operation of the business or agricultural enterprise must be a
22 substantial professional activity of at least one of the principal owners, as determined
23 by the authority. The principal owner and the principal owner's spouse are not eligible
24 for a credit for investment in that business, except that this restriction does not apply
25 to an agricultural enterprise. A tax credit certificate may not be issued to a parent,
26 sibling or child of a principal owner if the parent, sibling or child has any existing
27 ownership interest in the business or agricultural enterprise.
28 F. The investment must be expended on plant, equipment, research and development,
29 or working capital for the business or such other business activity as may be approved
30 by the authority. For an agricultural enterprise, the investment may also be expended
31 on infrastructure, which does not include real estate but includes any improvement that
32 expands the marketing, production or processing of agricultural products, as defined in
33 Title 7, section 152, subsection 2, as approved by the authority.
34 G. The authority shall establish limits on repayment of the investment. The investment
35 must be at risk in the business or agricultural enterprise.
36 H. The investors qualifying for the credit must each own less than 1/2 of the business.
37 This paragraph does not apply to an agricultural enterprise.
38 I. The business or agricultural enterprise receiving the investment may not be in
39 violation of the requirements of subsection 7.
40Sec. 2. 36 MRSA §5216-B, sub-§2, as amended by PL 2017, c. 170, Pt. E, §3, is
41 further amended to read:
422. Credit. An investor, including, beginning with tax years beginning on or after
43 January 1, 2025, an investor in an agricultural enterprise, is entitled to a credit against the
44 tax otherwise due under this Part equal to the amount of the tax credit certificate issued by
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45 the Finance Authority of Maine in accordance with Title 10, section 1100‑T and as limited
46 by this section. Except with respect to tax credit certificates issued under Title 10, section
471100‑T, subsection 2‑C, in the case of partnerships, limited liability companies, S
48 corporations, nontaxable trusts and any other entities that are treated as flow-through
49 entities for tax purposes under the Code, the individual partners, members, stockholders,
50 beneficiaries or equity owners of such entities must be treated as the investors under this
51 section and are allowed a credit against the tax otherwise due from them under this Part in
52 proportion to their respective interests in those partnerships, limited liability companies, S
53 corporations, trusts or other flow-through entities. Except as limited or authorized by
54 subsection 3 or 4, 25% of the credit must be taken in the taxable year in which the
55 investment is made and 25% per year must be taken in each of the next 3 taxable years.
56 With respect to tax credit certificates issued under Title 10, section 1100‑T, subsection 2‑C,
57 the credits are refundable and the investor shall file a return requesting a refund for an
58 investment for which it has received a tax credit certificate in the calendar year following
59 the calendar year during which the investment was made.
16SUMMARY
17 This bill allows an agricultural enterprise to qualify for the Maine Seed Capital Tax
18 Credit Program, which provides an eligible business a tax credit for investments in plant,
19 equipment, research and development, or working capital for the business or such other
20 business activity as may be approved by the Finance Authority of Maine. The bill allows
21 an agricultural enterprise determined eligible by the authority to qualify for a tax credit for
22 investments made in infrastructure, not including real estate, but including any
23 improvement that expands the marketing, production or processing of agricultural
24 products, in addition to the qualifying investments that may be made by a business.
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