Income/Franchise:
Maine: Adopted Rules Reflect New Bright-Line Nexus Standard Under Corporate Income Tax

Adopted Reg. Section 18-125-801; Adopted Reg. Section 18-125-810, Me. Rev. Serv. (eff. 4/20/22). Maine Revenue Services (MRS) amended “Rule 810” (Maine Unitary Business Taxable Income, Combined Reports and Tax Returns) to:

• Reflect legislative changes related to factor presence nexus thresholds that apply to tax years beginning on or after January 1, 2022 [see LD 1216 / HP 891 (2021) for more details on these law changes],
• Address the utilization of income tax credits among taxable corporations that are members of a unitary group, and
• Make certain technical changes.

Maine corporate income tax law now incorporates a “bright-line” economic nexus standard applicable to tax years beginning on or after January 1, 2022, so that a corporation generally is deemed to have nexus with Maine if it:

• Is organized or commercially domiciled in Maine; or
• Is organized or commercially domiciled outside Maine but has property, payroll or sales in Maine exceeding any of the following thresholds for the taxable year:
• For property, $250,000;
• For payroll, $250,000;
• For sales, $500,000; or
• 25% of the corporation’s property, payroll, or sales.

MRS also amended “Rule 801” (Apportionment) to reflect the new factor presence nexus standards, provide a definition for “affiliated group,” and make certain technical changes. The two revised rules took effect on April 20, 2022. Please contact us with any questions.