Study: Closing Offshore Tax Loophole Can Save Maine Millions

  • Posted on: 5 February 2014
  • By: admin

Added revenue could prevent deep, unnecessary cuts to local services

As the legislature debates how to prevent cuts to revenue sharing funds for municipalities, the Maine Small Business Coalition released a new report today that details how Maine can take steps to curb offshore tax dodging, making available millions of dollars in revenue previously lost to corporate tax havens.

“Closing the Billion Dollar Loophole,” a report authored by the U.S. Public Interest Research Group, estimates that Maine could save $14 million over a two year budget cycle by enacting a simple, proven method to curb offshore tax dodging that's already in effect in other states.

Using a process called combined reporting, which requires companies to list the profits of all their subsidiaries on their tax forms, states like Montana and Oregon can treat money stored by companies in known tax havens as domestic income subject to taxation. Maine is one of a handful of states that already employs combined reporting and could follow the systems established by Montana and Oregon.

A bill to implement this system has been submitted by Representative Adam Goode (D-Bangor), and will have a work session this afternoon. “This presents a real opportunity for action at the state level to raise revenue by closing corporate tax loopholes,” said Goode, who serves as Chair of the Taxation Committee. “This report shows that we don’t have to wait for Congress to take meaningful action to ensure big companies are paying their fair share like the rest of us.”

The study comes on the heels of Governor LePage’s State of the State address in which the governor proposed more tax breaks for large companies, but avoided any mention of how to fill the state's budget hole or avoid cuts to revenue sharing and other state programs.

“Maine small businesses and the communities they serve are the ones who suffer when big companies shirk their responsibilities,” said MSBC member Alex Jackimovicz, an electrician from Boothbay. “At a time when Governor LePage is again proposing cuts to revenue sharing that will devastate our communities and lead to cuts in education and public safety, we have an opportunity to demonstrate another path forward. It's time for large corporations to join small businesses in paying their fair share.”

A link to the full report can be found here: