Sponsor proposes bigger, more measurable R&D tax credit and new reporting requirements; administration warns of concentrated benefits and fiscal cost

Representative Tiffany Sayre presented LD 926, a proposal to expand Maine’s research expense tax credit and to add annual reporting and performance measures for legislative oversight.

The sponsor said the bill would: raise the credit percentage (from 5% to 10% of qualifying expenses exceeding a base), reduce the base amount (currently 100% of the average of the prior three years) to 50% to broaden eligibility for smaller or early‑stage firms, increase the per‑taxpayer credit limit, and improve public reporting and evaluation metrics so the Legislature and OPEGA can better judge the program’s effectiveness.

Proponents including the Maine State Chamber of Commerce told the committee the credit is a tool to encourage private‑sector research, jobs in STEM fields and long‑term economic growth; Linda Caprera of the chamber said lowering the base amount would make the credit accessible to firms that budget consistent R&D annually rather than those with large year‑over‑year increases.

Maine Revenue Services and the administration opposed or expressed reservations. Michael Allen said the combined changes ‘‘present a significant expansion’’ of the credit and that, while nonrefundable, the bill’s scale could produce a preliminary estimated revenue loss of $7.5–$10 million annually. He added that benefits of the credit are often concentrated among a small number of large taxpayers and that without stronger data and targets the Legislature risks funding R&D expenditures that businesses would have made anyway.

The Maine Center for Economic Policy also opposed the bill, saying tax subsidies are less effective than direct public investments in research, workforce and infrastructure; the center supported more transparency and OPEGA’s involvement in defining metrics.

Representative Sayre said the bill includes reporting language spelling out public policy objectives and performance indicators so analysts and OPEGA can evaluate results and inform future changes.

Why it matters: The change aims to increase R&D spending in Maine, boost high‑value jobs, and give the Legislature measurable data to evaluate the credit. The administration and policy analysts warned of concentrated beneficiaries, fiscal cost and the need for careful implementation and monitoring.

Next steps: Committee requested fiscal detail and asked that reporting measures be reviewed with OPEGA; staff and sponsors to work on draft amendments.