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LD 125

An Act To Increase The Total Amount Of Credits Authorized Under The Maine Seed Capital Tax Credit Program

132nd Legislature (2025-2026) Introduced by Teresa Pierce

The bill raises the annual Maine Seed Capital Tax Credit cap from $5M to $10M starting in 2027 to spur more seed-stage investments.

Signed by Governor
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Bill Summary · LD 125

Summary — LD 125 (132nd Maine Legislature)

Title: An Act To Increase The Total Amount Of Credits Authorized Under The Maine Seed Capital Tax Credit Program
Status: Signed by Governor (July 1, 2025)
Introduced: January 8, 2025
Subject: Seed capital tax credit; income tax credits

Purpose / Intent

LD 125 raises the annual cap on tax credit certificates available under the Maine Seed Capital Tax Credit Program with the stated intent of encouraging additional private investment in Maine seed‑stage businesses by permitting the Finance Authority of Maine (FAME) to award more credits to qualifying investors.

Key provisions

  • Increases the maximum annual amount of tax credit certificates FAME may issue under the Maine Seed Capital Tax Credit Program from $5,000,000 to $10,000,000.
  • The increase applies to investments made in calendar years beginning with 2027.
  • No changes in the bill text (as provided) to the underlying credit rate, eligibility requirements, or other program mechanics — the change is limited to the annual dollar cap on certificates issued.

Who is affected

  • Investors in qualifying Maine seed‑stage businesses: more tax credits may be available to reduce income tax liability for investors making eligible investments beginning in calendar year 2027.
  • Finance Authority of Maine: will administer issuance of the increased amount of certificates under the existing program framework.
  • State finances: increased use of credits reduces General Fund and certain other state revenue receipts (see fiscal impact).

Fiscal impact (per fiscal notes)

  • The Bureau of Revenue Services (Department of Administrative and Financial Services) is projected to experience decreased revenue associated with the increased cap:
    • FY 2027–28: General Fund decrease of $442,700; Other Special Revenue Funds decrease of $23,300.
    • FY 2028–29: General Fund decrease of $907,250; Other Special Revenue Funds decrease of $47,750.
  • No fiscal impact is shown for FY 2025–26 and FY 2026–27 in the provided notes; the revenue effects begin in FY 2027–28 because the cap increase applies to investments starting in calendar year 2027.

Legislative actions / timeline

  • Referred to the Committee on Taxation (Jan 8, 2025); work sessions and committee amendment (Committee Amendment “A” / C “A” (S‑75)) adopted.
  • Engrossed as amended, passed both chambers (House and Senate) in June 2025.
  • Placed on the Special Appropriations Table briefly, then ordered sent for enactment.
  • Signed by the Governor on July 1, 2025 — now enacted.

Notes

  • The bill expands capacity of an existing tax‑credit program rather than altering eligibility criteria or credit rates.
  • The increase is intended to stimulate additional seed‑stage investment in Maine but will reduce state revenue to the General Fund and certain other funds as estimated above.

Compiled from official sources — confirm details with the bill’s official record.

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