Maine Revised Statutes Title 36 Sec. 5206 – Franchise tax on financial institutions
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A tax is imposed for each calendar year or fiscal year ending during that calendar year upon the franchise or privilege of doing business in this State of every financial institution that has Maine net income or Maine assets and that has a substantial physical presence in this State sufficient to satisfy the requirements of the due process and commerce clauses of the United States Constitution. A financial institution is subject to tax under this section even if it is treated as a partnership, S corporation or entity disregarded as separate from its owner for federal income tax purposes under the Code. Each financial institution shall determine the tax due using one of the following methods: [PL 2005, c. 608, §1 (RPR); PL 2005, c. 608, §5 (AFF).]
1. Franchise tax on Maine net income and Maine assets. The sum of:
A. One percent of the financial institution’s Maine net income; and [PL 2005, c. 608, §1 (NEW); PL 2005, c. 608, §5 (AFF).]
B. Eight cents per $1,000 of the financial institution’s Maine assets; or [PL 2005, c. 608, §1 (NEW); PL 2005, c. 608, §5 (AFF).]
[PL 2005, c. 608, §1 (RPR); PL 2005, c. 608, §5 (AFF).]
Terms Used In Maine Revised Statutes Title 36 Sec. 5206
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Code: means the United States Internal Revenue Code of 1986 and amendments to that Code as of December 31, 2022. See Maine Revised Statutes Title 36 Sec. 111
- Financial institution: means :
A. See Maine Revised Statutes Title 36 Sec. 5206-DMaine assets: means a financial institution's total end-of-year assets required to be reported pursuant to the laws of the United States on Internal Revenue Service Form 1120, 1120S, 1065 or any other Internal Revenue Service form used to report end-of-year assets or, in the case of an entity with a single owner that may be disregarded as an entity separate from its owner pursuant to Internal Revenue Service regulations, the financial institution's total end-of-year assets determined as if the entity were required to file Internal Revenue Service Form 1065, multiplied by the fraction obtained pursuant to Maine Revised Statutes Title 36 Sec. 5206-D Maine net income: means , for any taxable year, a financial institution's net income or loss per books required to be reported pursuant to the laws of the United States on Internal Revenue Service Form 1120, 1120S, 1065 or any other Internal Revenue Service form used to report net income or loss per books or, in the case of an entity with a single owner that may be disregarded as an entity separate from its owner pursuant to Internal Revenue Service regulations, the financial institution's net income or loss per books determined as if the entity were required to file Internal Revenue Service Form 1065, and apportioned to this State under Maine Revised Statutes Title 36 Sec. 5206-D Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses. Return: means any document, digital file or electronic data transmission containing information required by this Title to be reported to the State Tax Assessor. See Maine Revised Statutes Title 36 Sec. 111 State: means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States or any foreign country. See Maine Revised Statutes Title 36 Sec. 5206-D Tax: means the total amount required to be paid, withheld and paid over or collected and paid over with respect to estimated or actual tax liability under this Title, any credit or reimbursement allowed or paid pursuant to this Title that is recoverable by the assessor and any amount assessed by the assessor pursuant to this Title, including any interest or penalties provided by law. See Maine Revised Statutes Title 36 Sec. 111 United States: includes territories and the District of Columbia. See Maine Revised Statutes Title 1 Sec. 72 Year: means a calendar year, unless otherwise expressed. See Maine Revised Statutes Title 1 Sec. 72
2. Franchise tax on Maine assets only. Thirty-nine cents per $1,000 of the financial institution’s Maine assets.
[PL 2005, c. 608, §1 (RPR); PL 2005, c. 608, §5 (AFF).]
3. Credit against tax.
[PL 2005, c. 608, §1 (RP); PL 2005, c. 608, §5 (AFF).]
4. Increase in franchise tax.
[PL 1985, c. 783, §34 (RP).]
Each financial institution subject to the tax under this chapter shall elect to calculate and pay tax under the method in subsection 1 or 2. The financial institution shall make the election on its annual state tax return and the election cannot be revoked with respect to that tax year. If a financial institution fails to make an election, the method established in subsection 1 must be used and is deemed an election for purposes of this section. [PL 2005, c. 608, §1 (NEW); PL 2005, c. 608, §5 (AFF).]
In each taxable year in which a financial institution sustains a book net operating loss, a credit must be allowed against the franchise tax on assets under subsection 1. The credit must be computed by multiplying the Maine net income by the applicable franchise tax rate imposed by subsection 1, paragraph A. The total amount of any credit allowed may not exceed the franchise tax on assets due under subsection 1, paragraph B. In any tax year in which there is excess credit, the excess credit must be carried forward for no more than the next 5 tax years and may be applied against the tax computed under subsection 1. [PL 2019, c. 607, Pt. C, §4 (AMD).]
SECTION HISTORY
PL 1977, c. 686, §14 (NEW). PL 1979, c. 587, §5 (AMD). PL 1981, c. 704, §§6,7,10 (AMD). PL 1983, c. 477, Pt. F, Subpt. 3, §2 (AMD). PL 1983, c. 590, §3 (AMD). PL 1983, c. 842, §2 (RPR). PL 1983, c. 855, §§23,24 (AMD). PL 1983, c. 862, §§89,90 (AMD). PL 1985, c. 783, §§33,34 (AMD). PL 1997, c. 404, §2 (AMD). PL 1997, c. 404, §10 (AFF). PL 1997, c. 746, §14 (AMD). PL 1997, c. 746, §24 (AFF). PL 2005, c. 608, §1 (RPR). PL 2005, c. 608, §5 (AFF). PL 2019, c. 607, Pt. C, §4 (AMD).