AUGUSTA — Maine lawmakers are divided along party lines over whether to carry over several personal and business tax breaks to state income tax returns after Congress revived the expired breaks in December.

Democrats and Republicans agree on extending most of the tax breaks, but the parties disagree on whether to extend to the 2016 tax year a program that provides a tax credit to companies that spend more than $2.5 million on new business equipment.

The Republican-majority Senate approved a bill last week that would extend the tax breaks for two years.

But the Democratic-controlled House on Tuesday amended the bill to eliminate the tax credit program for companies for the 2016 tax year and allocate $23 million in state aid to the public school system.

The added revenue for schools would close their anticipated funding shortfall.

Rep. Adam Goode, D-Bangor, said extending the tax credit for capital investment would mean “saying ‘yes’ to big, powerful people,” while reducing state revenues for needed programs.

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But Rep. Jeffrey Timberlake, R-Turner, said an extension would keep companies from leaving Maine.

“This is a jobs bill,” he said during debate in the House on Tuesday. “The money that Maine companies save allows them to make more capital investment in Maine.”

The 79-67 vote to amend the plan was divided almost entirely along party lines.

The amended bill now goes to the Senate, which is expected to debate the measure Thursday.

Otherwise legislators agree on extending the breaks, including a $250 write-off for teachers who spend their own money on school supplies, a program that helps small businesses by extending a higher maximum deduction for depreciable assets, and a provision that gives tax-free status for charitable donations taken from individual retirement accounts.

Gov. Paul LePage also weighed in Tuesday, telling WVOM listeners that Maine is “getting the federal government to give us a tax break, and the Democrats in the House of Representatives are saying ‘no.’ ”

If state legislators can’t agree on the issue, Maine taxpayers won’t be able to claim the federal tax breaks on their 2015 state returns, due April 15.


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