AUGUSTA – Governor Janet Mills announced on Wednesday that she has asked her departments to explore whether federal funding could exist to help Maine provide the same beneficial tax treatment to P3 funds that the federal government has, according to a statement from hurry.
“I am proud of the hundreds of small businesses across the state who have used P3 funds to keep people employed, to keep their doors open and to keep our economy afloat during a time of extraordinary financial distress,” Governor Mills said.
“The federal government recognized the value of its efforts when, at the end of December, it said it would offer a double taxation benefit on products spent appropriately. Unfortunately, at the time, it also did not offer compensation to states for the loss of these tax revenues.
“My approach as governor has always been to solve problems. The proposal we have presented is a starting point and there is still work to be done. Now, with the Biden administration in place, I’m asking my departments to take a fresh look at the possibility of finding newly available federal funds that would allow Maine to keep our budget balanced and embrace the same additional benefit that was offered. by the federal government. to the many entities that have received PPP.
“I want to work with the Legislative Assembly and others to do all we can to find solutions that will help small businesses through this time of extraordinary difficulty.
The Mills administration proposed to maintain the standard P3 treatment so that no business in Maine owes state taxes on funds spent to keep employees on payroll or on other deductible expenses such as rent or utilities, the release said.
The Mills administration would prefer, the statement said, to comply with the federal government’s dual benefit of treating these P3 funds as tax-free and allowing related expenses as deductions, but, at an estimated cost of $ 100 million, was not able to do so. and always balance the budget, especially without additional federal aid to states like the one Congress recently rejected.
The governor called on her departments to immediately and quickly undertake a review to determine if there is any newly available federal funds that could be leveraged to help business results and preserve a carefully balanced budget.