Overview
- Gov. Janet Mills signed LD 2212 as a supplemental budget measure, adding a 2% surcharge on income above $1 million for individuals and $1.5 million for joint filers.
- The change raises Maine’s top income tax rate from 7.15% to 9.15% and state analysts expect about 2,600 taxpayers to be affected.
- The surcharge applies to tax years starting Jan. 1, 2026, so affected filers will first see it on 2026 returns filed in 2027.
- Supporters say the revenue will make Free Community College permanent and expand housing, childcare, property tax relief, and school funding.
- Business groups and the Tax Foundation argue the gain, projected at about $160 million over two years, could come at the cost of local business sales, reinvestment, and competitiveness as other states cut rates and some blue states add surtaxes.