More Information About Specialized Programs

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Major Business Headquarters Expansion Program (MBHQ)

On November 1, 2017, PL 297, An Act to Promote Major Business Headquarters Expansions in Maine, Promote the Commercialization of Research and Development in Maine and Create Jobs, became law. This program is intended to encourage the location and expansion of major business headquarters in the State of Maine and to promote the recruitment and training of employees for these facilities. The location and expansion of major business headquarters in Maine will create high-quality jobs, benefit small businesses that supply goods and services to the major business headquarters and its employees, increase the tax base, and provide many other direct and indirect economic benefits to the State.

Application Process:

A qualified applicant must satisfy the following criteria to be eligible to apply for this program:

  • The company's principal facility, from which the applicant directs its national or global business activities, is or will be located in Maine;
  • The applicant employs at least 5,000 full-time employees worldwide, of which at least 25% are or will be based in Maine;
  • The applicant has business locations in at least 3 other states or foreign countries; and
  • The applicant intends to make a qualified investment within Maine of at least $35,000,000 to design, permit, construct, modify, equip, or expand the applicant's headquarters.

A qualified applicant that meets these criteria may submit a letter and supporting documentation to the Commissioner of the Department of Economic and Community Development (DECD) for a certificate of approval. 

Once an applicant has submitted the requested documentation, the Commissioner will determine whether the applicant is a qualified applicant. Within 30 days of the date DECD determines the application is complete, DECD will issue a certificate of approval or a written denial indicating why the applicant is not qualified. The certificate of approval, issued by the Commissioner of DECD, will describe the qualified investment and specify the total amount of qualified investment approved under the certificate. 

Once the expansion is complete, the Commissioner will issue a certificate of completion. Upon issuance of a certification of completion, the Commissioner of DECD will issue a certification letter to the qualified applicant that describes the qualified investment and specifies the total amount of qualified investment approved by the certification.

Program Benefits:

  • Beginning with the tax year during which the certificate of completion is issued or the tax year beginning in 2020, whichever is later, and for each of the following 19 tax years, a certified applicant is allowed a credit against the tax due for the taxable year in an amount equal to 2% of the certified applicant's qualified investment
  • A credit is not allowed for any tax year during which the taxpayer does not meet or exceed employment targets measured on the last day of the tax year
  • For each of the first 10 tax years for which the credit is claimed, there must be a total of at least 80 additional full-time employees based in the State whose jobs were added since the first day of the first tax year for which the credit was claimed, multiplied by the number of years for which the credit has been claimed
  • For each tax year after the 10th tax year for which the credit is claimed, the taxpayer must employ a total of at least 800 additional full-time employees based in the State whose jobs were added since the first day of the first tax year for which the credit was claimed
  • Cumulative credits may not exceed $16,000,000 under any one certificate

Reporting Requirements:

On or before March 1st of each year, a certified applicant must file a report with the Commissioner of DECD for the tax year ending immediately preceding the calendar year. The certified applicant's report shall contain the following information:

  • Number of full-time employees based in the State of Maine
  • Incremental amount of qualified investment made in the report year

The Commissioner of DECD must provide copies of the report to the State Tax Assessor and the joint standing committee of the Legislature having jurisdiction over tax matters at the time the report is received.

By April 1st of each year, the commissioner shall report to the joint standing committee of the Legislature having jurisdiction over tax matters aggregate data on employment levels and qualified investment amounts of certified applicants for each year.

The State Tax Assessor shall report to the committee the revenue loss during the previous calendar year, including the loss due to refundable credits, as a result of this program for each taxpayer claiming the credit.

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Major Food Processing Manufacturing Expansion Program

Note: Additional applications for this program are no longer being accepted, as new certificates may not be issued without exceeding the program funding limit.

On June 19, 2019, PL 386, An Act to Promote Major Food Processing and Manufacturing Facility Expansion and To Create Jobs in Maine, became law. This program is intended to encourage the location and expansion of food processing and manufacturing facilities in the State of Maine, create employment opportunities, and generate significant economic growth. 

Applicant Qualifications:

A qualified applicant must satisfy, at time of application for a certificate of approval, the following criteria:

  • The applicant’s headquarters are, and have been for each of the last 5 years, located in Maine;
  • The applicant intends to make a qualified investment in Maine within 5 years following the date of the application;
  • Construction of the applicant’s facility shall not have commenced prior to April 1, 2019 as evidenced by the date of issuance of an appropriate municipal building permit;
  • The applicant employs, or will employ upon startup of the facility, at least 40 full-time employees in Maine;
  • The annual income derived from employment with the applicant of at least 75% of the applicant’s employees exceeds the most recent annual per capita personal income in the county in which the facility is located.

“Qualified investment” means an investment of at least $35,000,000 to design, permit, construct, modify, equip, or expand the applicant's facility in the State. The investments and activities of a qualified applicant and other entities that are members of the qualified applicant’s unitary business may be aggregated to determine whether a qualified investment has been made. A qualified investment does not include an investment made prior to April 1, 2019 or after December 31, 2024.

Procedures for application; Certificate of Approval:

A qualified applicant may apply to the Commissioner of DECD for a certificate of approval. An applicant shall submit to the commissioner information demonstrating the applicant is a qualified applicant. If a certified applicant undertakes to make an additional qualified investment, the certified applicant may apply to the commissioner for an additional certificate of approval.

The Commissioner, within 30 days of receipt of an application, shall determine whether the applicant is a qualified applicant and shall issue a certificate of approval or a written denial indicating why the applicant is not qualified. The certificate of approval, issued by the Commissioner of DECD, must describe the qualified investment and specify the total amount of qualified investment approved under the certificate. 

Once the expansion is complete, the Commissioner will issue a certificate of completion. Upon issuance of a certification of completion, the Commissioner of DECD shall issue, on behalf of the State, a memorandum to the qualified applicant, describing the benefits provided by this section at the time the certificate of completion is issued.

A certified applicant must obtain approval from the Commissioner to transfer the certificate of approval, or if the certified applicant has obtained a certificate of completion, that certificate of completion, to another person. A certificate of approval or certificate of completion may be transferred only if all or substantially all of the assets of the certified applicant are, or will be, transferred to that person or if 50% or more of the certified applicant’s voting stock is, or will be, acquired by that person. The Commissioner shall approve the transfer of the certificate of approval or the certificate of completion in accordance with 36 MRSA §5219-VV(2)(D).

The Commissioner must revoke a certificate of approval if the certified applicant or person to whom a certificate of approval has been transferred fails to make a qualified investment within 5 years of the date of the certificate of approval, if the applicant ceases operation of the headquarters in the State, or if the certificate of approval or certificate of completion is transferred without approval from the Commissioner.

Program Benefits:

  • Beginning with the tax year during which the certificate of completion is issued or the tax year beginning in 2022, whichever is later, and for each of the following 19 tax years, a certified applicant is allowed a credit against the tax due for the taxable year in an amount equal to 1.8% of the certified applicant's qualified investment.
  • A credit is not allowed for any tax year during which the taxpayer does not meet or exceed employment targets measured on the last day of the tax year.
  • For each of the first 3 tax years for which the credit is claimed, there must be a total of at least 40 additional full-time employees based in the State whose jobs were added since the first day of the first tax year for which the credit was claimed.
  • For each tax year after the 3rd tax year for which the credit is claimed, the taxpayer must employ a total of at least 60 full-time employees based in the State whose jobs were added since the first day of the first tax year for which the credit was claimed.
  • Jobs for full-time employees that are counted for determining eligibility for the credit under one certification of completion may not be counted for determining eligibility for the credit under a separate certificate of completion.
  • A credit is not allowed for any tax year following 2 consecutive tax years during which the certified applicant did not have between $5,500,000 and $12,000,000 in ordinary business income.
  • Cumulative credits may not exceed $30,600,000 under any one certificate.

Reporting Requirements:

On or before March 1st of each year, a certificated applicant shall file a report with the Commissioner of DECD for the tax year ending immediately preceding the calendar year. The certified applicant's report shall contain the following information:

  • Number of full-time employees based in the State of Maine
  • Incremental amount of qualified investment made in the report year

The Commissioner of DECD must provide copies of the report to the State Tax Assessor and the joint standing committee of the Legislature having jurisdiction over tax matters at the time the report is received.

By April 1st of each year, the commissioner shall report to the joint standing committee of the Legislature having jurisdiction over tax matters aggregate data on employment levels and qualified investment amounts of certified applicants for each year.

The State Tax Assessor shall report to the committee the revenue loss during the previous calendar year, including the loss due to refundable credits, as a result of this program for each taxpayer claiming the credit.

The Office of Program Evaluation and Government Accountability (OPEGA) shall submit an evaluation of the credit provided under this section to the joint legislative committee established to oversee program evaluation and government accountability and the joint standing committee of the Legislature having jurisdiction over taxation matters. The evaluation parameters to perform the review are detailed in 36 MRSA §5219-VV(7).

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Maine Shipbuilding Facility Investment Tax Credit Program

On April 4, 2018, PL 361, An Act To Encourage New Major Investments in Shipbuilding Facilities and the Preservation of Jobs became law in Maine. This program is intended to create and retain jobs in the shipbuilding industry, encourage investment in shipbuilding businesses, and improve the competitiveness of the State’s shipbuilding industry.   

Applicant Qualifications:

A qualified applicant must satisfy, at the time of application for a certificate of approval, the following criteria:

  • The applicant owns and operates or proposes to construct and operate a Maine shipbuilding facility;
  • The applicant proposes to make a qualified investment in Maine;
  • The applicant employs at least 5,000 qualified employees at the time the application is filed; and
  • The applicant does not otherwise qualify for the Pine Tree Development Zone Program or the Maine Employment Tax increment Financing program at the time the application is filed.

“Qualified investment” means expenditures incurred on or after January 1, 2018 that total at least $100,000,000 as described in 36 MRSA §5219-RR(1)(I).

Procedures for application and Certificate of Approval:

A qualified applicant may apply to the Commissioner of DECD for a certificate of approval. An applicant shall submit to the commissioner information demonstrating the applicant is a qualified applicant. A certified applicant may hold only one certificate under this section at any time.

The Commissioner, within 30 days of receipt of an application, shall review the information contained in the application and issue a written determination as to whether the applicant is a qualified applicant. If the Commissioner determines that the applicant is a qualified applicant, the Commissioner shall issue a certificate of approval to the qualified applicant at the time of the determination. 

A certified applicant shall obtain approval from the Commission to transfer the certificate of approval, or if the certified applicant has obtained a certificate of completion, that certificate of completion to another person. A certificate of approval or certificate of completion may be transferred only if the transferee of the Maine shipbuilding facility or of the certified applicant’s stock is a member of the certified applicant’s unitary affiliated group at the time of the transfer or the transferee of the Maine shipbuilding facility or of the certified applicant’s stock is not a member of the certified applicant’s unitary affiliated group at the time of transfer and the Commissioner finds that the transferee intends to continue the operations of the Maine shipbuilding facility in substantially the same manner as prior to the transfer and has the financial capability to do so.

If the Commissioner grants a transfer of the certificate of approval, the transferee must be treated as the certified applicant. For purposes of calculation of employment and qualified investments of the certified applicant, the qualified employees and the qualified investments of the transferor prior to transfer must be considered the qualified employees and qualified investments of the transferee.

A certificate of approval must be revoked by the Commissioner if the certified applicant has not made qualified investments of at least $100,000,000 within 5 years after issuance of the certificate of approval.

Program Benefits:

  • Beginning with the tax year after the certified applicant has made qualified investments of at least $100,000,000 or the tax year beginning on or after January 1, 2020, whichever is later, and for each of the following 9 tax years, a certified applicant is allowed a credit against the tax due under this part for each taxable year in an amount equal to 3% of the certified applicant’s total qualified investment.
  • If a certified applicant completes an additional qualified investment of at least $100,000,000 prior to January 1, 2025, the certified applicant is allowed a credit against the tax beginning with the 11th tax year after the investment referenced above was made and continuing through the 15th tax year after making that investment. The amount of the additional credit available in each of those tax years is 3% of the certified applicant’s additional qualified investment. Eligibility for the additional credit must be demonstrated by the certified applicant in the required annual report submitted to DECD.
  • The annual credit allowed to a certified applicant or its transferee may not exceed $3,000,000 in any tax year. Cumulative credits taken under this section may not exceed $45,000,000 to any certified applicant or transferee.
  • For a tax year in which the qualified applicant has employment of fewer than 5,500, the amount of the credit is reduced.
  • A taxpayer that is certified as a qualified Pine Tree Development Zone business or that has received a certificate of approval for its employment tax increment financing program is not eligible for a credit under the Major Investments in Shipbuilding Facilities program.
  • In no case may the credit be claimed for a tax year that begins after December 31, 2034.
  • Accelerated Credit: If a certified applicant has employment in any tax year of at least 6,000 the credit limitation is increased to $3,125,000 for that tax year. If employment is at least 6,500 the credit limitation is increased to $3,250,000. If employment is at least 7,000 the credit is increased to $3,375,000. If employment is 7,500 or more, the credit is increased to $3,500,00.
  • Reduced Credit: If a certified applicant’s employment is fewer than 5,500 employees during the tax year, the credit allowed is reduced as described in 36 MRSA §5219-RR(6)(A-G).  
  • Additional requirements: A certified applicant, when awarding contracts, purchasing supplies, or subcontracting work related to a qualified investment shall give preference, to the greatest extent possible, to Maine workers, companies, and bidders as long as the supplies, products, services, and bids meet the standards required by the certified applicant regarding value, qualify, delivery terms, and price.

Reporting Requirements:

On or before March 1st of each year, a certified applicant shall file a report with the Commissioner of DECD for the tax year ending immediately preceding the calendar year. The certified applicant's report shall contain the following information:

  • Number of full-time employees based in the State of Maine
  • Incremental amount of qualified investment made in the report year

The Commissioner of DECD must provide copies of the report to the State Tax Assessor and the joint standing committee of the Legislature having jurisdiction over tax matters at the time the report is received.

By April 1st of each year, the commissioner shall report to the joint standing committee of the Legislature having jurisdiction over tax matters aggregate data on employment levels and qualified investment amounts of certified applicants for each year.

The State Tax Assessor shall report to the committee the revenue loss during the previous calendar year, including the loss due to refundable credits, as a result of this program for each taxpayer claiming the credit.

The Office of Program Evaluation and Government Accountability (OPEGA) shall submit an evaluation of the credit provided under this section to the joint legislative committee established to oversee program evaluation and government accountability and the joint standing committee of the Legislature having jurisdiction over taxation matters. The evaluation parameters to perform the review as detailed in 36 MRSA §5219-RR(10).

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