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Pine Tree Zone

The Pine Tree Zone (PTZ) uses a combination of powerful tax incentives to spur economic development in targeted areas of the State of Maine. Qualified businesses in a Pine Tree Zone will be entitled to a number of benefits, including: paying no Maine income taxes for the first through fifth year of the project; a 50% reduction of Maine income taxes for year six through 10 of the project; a 10-year sales tax exemption for sales to construction contractors of items to be incorporated into the real property associated with a qualifying project; a 10-year sales tax exemption for sales of all tangible personal property to a qualifying business; and expanding the E-TIF program to an 80% reimbursement of employee withholding taxes for qualified employees in a Pine Tree Zone.

This legislation creates a powerful economic development tool targeted to certain areas of the State of Maine. Businesses looking to locate or expand in certain areas of Maine may be eligible for these benefits.

Benefits

While the benefits to local businesses are substantial, most of the program cost is borne by the state:

• A 100% sales and use tax exemption for construction materials and equipment purchases;
• 80% E-TIF (Employee Tax Increment Financing) for ten years;
• A 100% refund of corporate income tax and insurance premium tax for five years and 50% refund for the second five years;
• A local option TIF (Tax Increment Financing) that will not be counted against a municipality’s existing TIF area and value caps.

It is important to note that eligible businesses include firms engaged in manufacturing, financial services, and the seven state designated targeted technology sectors. Retail, hospitality and warehousing are excluded from eligibility.

All Pine Tree Development Zone benefits may still be layered on other available benefits. For example, existing incentive programs, such as tax increment financing, BETR, job training, loan programs, rural empowerment zones, can be still used as incentives while businesses take advantage of the new Pine Tree Zone benefits.