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Maine R&D Tax Credits

Maine R&D Tax Credits

 

Find out if you qualify for R&D tax credits in Maine and recharge your business.

 

Maine offers an R&D Tax Credit and a Sales Tax Exemption for businesses engaged in specific specialized industries. Maine's Research Expense Tax Credit closely follows the federal R&D qualification guidelines and is applied for as part of a taxpayer's Maine corporate tax return.

Research Expense Tax Credit:
The credit is based on a percentage of the federal R&D Tax Credit under IRC § 41. The Maine R&D credit is calculated as follows:

  • 5% of the excess qualified research expenses (QREs) over the previous three-year average QREs plus 7.5% of the basic research payments.
  • Credit utilization is limited to 100% of the first $25,000 in corporate tax liability plus 75% of the tax liability above $25,000.
  • The credit cannot be carried back but can be carried forward for up to 15 years.


Sales Tax Exemptions
Maine sales tax exemptions are available for manufacturing, research and development expenses, custom computer programming, fuel & electricity, and biotechnology.
 

  • Manufacturing: Sales of machinery and equipment used by the purchaser directly and primarily in the production of tangible personal property for later sale or use are eligible for a sales tax exemption. In addition, items consumed or destroyed directly or primarily in production and repair and replacement parts for qualified production equipment are exempt from Maine sales tax.
  • Research and Development: Expenses related to machinery and equipment used by the taxpayer directly and exclusively in research and development are eligible for a sales tax exemption.
  • Custom Computer Programming: Any customized computer software purchased by a business is exempt from sales tax. Specifically, if a standard program is purchased and then customized, the cost of the standard program would be taxable, and the customizing, if separately stated, would be tax-exempt.
  • Fuel & Electricity For Use In Manufacturing: Manufacturers are exempt from paying 95% of the sales tax on fuel and/or electricity used in the manufacturing operation.
  • Biotechnology: Expenses for machinery, equipment, instruments, and supplies used by the purchaser directly and primarily in a biotechnology application are eligible for a sales tax exemption.

 

Learn more about Maine's R&D Tax Credit here or see Maine's R&D tax form here.

 

R&D Tax Credit Available:

Yes

 

Eligible Entities:

C-Corporations, S-Corporations, LLCs, Partnerships

 

Deadline for Tax Filing:

Due with the Maine Tax Return

 

Data Required to Compute Credit:

Claim Period Qualified R&D Expenses (QREs)

 

What Information is needed?

QREs for Prior 3 Years

Federal Form 6765

 

Credit Carryforward:

15 years

 

The R&D tax credit equals:

  • 5% of the excess qualified research expenses over the previous three-year average, plus
  • 7.5% of basic research payments (relating to research performed by qualified universities or scientific research organizations).

Specific Items to Note:

  • The credit is limited to 100% of the first $25,000 in income tax determined before other credits, plus 75% of the tax amount above $25,000.
  • The credit cannot be carried back but can be carried forward for up to 15 years.
  • Taxpayers that file a Combined Return (i.e., a controlled group) have special rules to follow.

 

Ready to calculate your R&D tax credits?

To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.

 

Track Your Refund

 
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