LD 341 stops tax evasion by multinational corporations, levels field for Maine businesses
AUGUSTA – A measure to prevent multinational corporations from evading Maine taxes by hiding profits in offshore tax havens won initial approval in the House on Thursday.
LD 341, An Act To Prevent Tax Haven Abuse, moves forward following a party line vote of 81-67.
“The accounting gimmicks used by these multinational corporations are shorting Maine an estimated $10 million each budget cycle,” said Rep. Ryan Tipping-Spitz, D-Orono, the bill’s sponsor. “These huge corporations make use of Maine’s infrastructure, public services and workforce but avoid paying their fair share. Their practices stick local Maine families and small businesses with the tab.”
Maine loses $10 million in each two-year budget period, according to an estimate made by the non-partisan Office of Fiscal and Program Review with help from Maine Revenue Services. This revenue could be used for priorities such as revenue sharing, increased property tax fairness credits and investments in education and the workforce.
Under Tipping-Spitz’s bill, corporations would have to report income from a list of known offshore tax havens, including Liechtenstein, Bahrain, Luxembourg and Monaco.
He noted that five states and the District of Columbia already have adopted practices like those in LD 341.
Maine already has domestic tax evasion checks in place to prevent corporations from hiding money in states like Delaware and Nevada.
“Let’s do the right thing for Maine businesses and taxpayers,” said Rep. Adam Goode, D-Bangor, the House chair of the Taxation Committee. “We need to close these tax code loopholes and stop this tax dodging that puts our small businesses at a competitive disadvantage.”
States lose an estimated $20 billion annually because of corporate use of offshore tax havens. It’s up to the states themselves to close these loopholes.
The bill faces further action in the House and Senate.