Speaker Mark Eves’ op-ed piece on tax conformity (“Why tax conformity matters to Maine,” Feb. 8), requires another perspective.

The Maine State Chamber of Commerce strongly disagrees with Speaker Eves on his characterization of the Maine Capital Investment Credit, as well as on some of his remarks on tax conformity.

The Legislature is currently considering a bill on tax conformity, which it does annually. In December — in a bipartisan effort, I might add — Congress and President Barack Obama expanded the current Section 179 deduction limits to $500,000 permanently and extended federal bonus depreciation through 2019. Congress and the president enacted this legislation in an effort to stimulate the nation’s economy and to increase job creation.

While the proposal before the Maine Legislature does adopt the Section 179 increase permanently, Maine usually decouples from the federal government and enacts its own version of bonus depreciation, called the Maine Capital Investment Credit. The proposal would extend this credit to 2019.

The credit is a bone of contention for some Democratic legislators, including Speaker Eves. Speaker Eves refers to this credit as a waste of money, and states that the credit applies retroactively to large businesses that may not even be operating in this state.

The reality is, the Maine Capital Investment Credit is an important piece of the tax conformity proposal that applies to more small and medium-sized Maine businesses than larger corporations.

According to Maine Revenue Services, this credit applies to over 4,000 Maine small and medium-sized businesses that operate as pass-through entities like limited liability corporations, S corporations or partnerships. That’s 4,000 Maine taxpayers who own companies that are trying to grow their business in this state and create jobs.

This credit is very important to small businesses. It helps a business plan their investments, purchase equipment they may not otherwise afford and assists with cash flow issues, thus helping small businesses stay afloat. I would hardly characterize this as a waste of money.

On the flip side, the credit would only apply to about 300 larger businesses. Thus, the Maine Capital Investment Credit clearly benefits Maine small businesses.

But we are talking jobs and the local economy here; the fact is the size of a company should be irrelevant. This discussion should not be about whether Maine should be supporting large versus small businesses – but businesses in general.

When it comes to jobs and job creation, the Legislature shouldn’t be in the business of picking winners and losers in our state. Maine needs more businesses of any size to locate here, and we should welcome all who come.

Legislators and you shouldn’t be fooled by the $23 million figure in education funding referred to by Eves. That’s a bait-and-switch tactic meant to link unrelated issues.

The adjustments in municipal funding are part of policy decisions knowingly made by legislators — adjustments made after the Department of Education has the state appropriation flow through the school funding formula. Even though other factors determine a municipalitiy’s total school subsidy, student population and a municipality’s valuation play a large part.

Some municipalities that are now seeing a revenue decrease in aid would have had to have experienced an increase in valuation or a decrease in school population or both. Some municipalities around the state are receiving more education funding dollars than previously because their valuation either went down or the student population increased.

Even so, last year, the Legislature increased state aid to education in the current two-year budget by $83 million over the previous two-year budget.

But really, the school funding is clearly a separate policy issue that may deserve another look, but has nothing to do with tax conformity, economic investment or efforts to create new jobs.

If we do not adopt the bonus depreciation provisions, Maine companies will no doubt be placed at a competitive disadvantage with companies that operate in states with accelerated depreciation. Companies in other states would be able to deduct business expenses faster and be more competitive than their counterparts in Maine. We need to keep Maine businesses competitive in this state, and we need to attract more investment in this state.

Remember, other states are actively recruiting and trying to lure Maine businesses away from us. We need to do everything possible to keep our businesses competitive and keep them and their jobs here.

Linda Caprara is a senior government affairs specialist at the Maine State Chamber of Commerce in Augusta.

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