The Maine Legislature voted unanimously last week to pass a measure that would conform the state tax code with the federal tax code. The bill, which will cost the state about $26.8 million in the next budget cycle, was introduced by Sen. Dana Dow (R-Lincoln Cty.) last year in an effort to align the state with the federal tax cuts passed by Congress last year. In a joint statement, Dow and Senate President Mike Thibodeau (R-Waldo Cty.) said that individuals and businesses would have been required to amend their 2017 returns and businesses would have had to keep two sets of books, one for federal taxes and another for state taxes, if the bill hadn’t passed.

“I am very pleased that we were able to get this done for the people of Maine and for the state’s small businesses,” said Thibodeau. “I would like to thank Senator Dana Dow for his hard work as chair of the Taxation Committee. He waded through very complex tax policy issues and was able to bring all sides together to put forth a bill that will benefit all Mainers.”

The new law makes a number of changes to the state tax code, including reducing income tax liability by conforming the standard deduction to the federal standard and increasing the amount at which the state itemized deduction phases out. It also repeals some business deductions and credits and reduces and eliminates some corporate taxes. The measure also expands the Property Tax Fairness Credit and adds a new $500 child tax credit for each qualifying child and dependent.

The liberal-leaning Maine Center for Economic Policy said the bill is imperfect, but the final compromise legislation got rid of some of the “worst policies” proposed in Gov. LePage’s original $124.9 million tax conformity bill, which included several more cut tax cuts for the wealthy and corporations.

“In the face of tremendous pressure to simply revise the state tax code to reflect the lopsided rewrite of federal tax law, Maine’s legislators opted to chart their own course. They rejected the worst policies handed down by Congress and proposed by the governor,” wrote MECEP Executive Director Garrett Martin. “And while the bill still contains some unnecessary and ineffective tax breaks for profitable businesses, the inclusion of an expanded Property Tax Fairness Credit will make a real difference for some of the low- and moderate-income Mainers left behind by the Trump tax cut.”

According to an analysis by the Urban-Brookings Tax Policy Center, 83 percent of the benefits of the Trump tax cuts will go to the top 1 percent of taxpayers, while 53 percent of Americans will pay more in taxes once the individual tax cuts expire in 2027.