Northern Maine Development Commission (NMDC) provides a wide range of services to both businesses and communities to stimulate economic growth and expansion. Our professional staff regularly works with representatives from member communities on a variety of planning, financial, and infrastructure projects.
NMDC is committed to working with member communities to attract and retain businesses in the area to foster long-term sustainable economic growth for the region. We offer a variety of programs and services to communities and businesses.
Business Attraction Services for Communities
- Develop strategies to attract business
- Assistance with obtaining funding for infrastructure projects necessary to attract various businesses
- Establish strategies to foster overall community and economic development
Business Attraction Services for Businesses
- Incentives & Financing
- Site Location
- Labor Market Information
Financing & Tax Incentives
NMDC can assist communities and businesses with a variety of programs to help attract and retain businesses. Some of the financial and tax incentive programs that we can assist with include:
- Commercial and Small Business Loans
- Employment Tax Increment Financing (ETIF)
- Tax Increment Financing (TIF)
- Governor’s Training Initiative (GTI)
Northern Maine Development Commission serves as a catalyst for economic development in northern Maine. As the federally designated Economic Development District for Aroostook and Washington Counties and the point of contact for information about the Aroostook County Empowerment Zone (ACEZ), we know firsthand how important the tax credit is to businesses in the region. This letter of support is in favor of the reauthorization of that credit.
ACEZ was designated as a new zone in 2002 under the EZ program’s out-migration criteria, with the region qualifying as a result of the large population loss experienced since the 1960s. With the closure of Loring Air Force Base in 1994 and the ongoing changes in the potato and forest industries—the traditional economic engines of the region—this population loss accelerated.
Empowerment Zone designation was seen as an important change in direction because the federal funding available through the EZ programs could have a powerful positive impact on the regional economy.
All that remained of the original Empowerment Zone designation was the tax credit, which has benefited many businesses in the region.
Also, the Aroostook Partnership, on behalf of its 100 businesses in Aroostook County, strongly endorses continuation of the tax credit, which creates or retains dozens of jobs in parts of Aroostook County.
The Pine Tree Development Zone (PTDZ) program offers eligible businesses the chance to greatly reduce or virtually eliminate state taxes for up to ten years. We work with expanding businesses, start-up businesses, and businesses relocating to Aroostook who employ anywhere from one to hundreds of people.
Eligible Sectors
Benefits
Depending on the level of new qualified business activity conducted in a PTDZ, starting with the statutory requirement for hiring a minimum of one net new qualified employee, the tax burden of qualified businesses may be reduced through the following exemptions, reimbursements, and credits:
• Corporate Income Tax Credit (100%, Years 1–5; 50%, Years 6–10): The tax credit benefit derives from net new PTDZ payroll and property as a percentage of all Maine payroll and property.
• Income Tax Reimbursement (80%, Years 1–10): The tax reimbursement benefit derives from income taxes withheld for net new jobs created, i.e., those qualified employees hired above the “old” employment baseline that existed in Maine prior to the expansion may be eligible for Employment Tax Increment Financing.
• Sales and Use Tax (100% Personal Property Exemption, Years 1–10): The tax exemption benefit, effective the later of July 1, 2005, or date of certification, derives from the qualified business paying no tax on all new tangible personal property purchases for its qualified business activity.
• Sales and Use Tax (100% Real Property Reimbursement, Years 1–10): The tax reimbursement benefit, effective the later of July 1, 2005, or date of certification, derives from paying no tax on all new tangible property purchases that are to be physically incorporated in, and become a permanent part of, real property of a qualified business and used in its qualified business activity.
Tax Increment Financing is a flexible finance tool used by county municipalities, towns, plantations, and the Unorganized Territory to leverage new property taxes generated by a specific project or projects within a defined geographic district. Any portion of the new taxes may be used to finance public or private projects for a defined period of time up to 30 years.
Currently, hundreds of Maine communities have TIF districts, from Fort Kent to Weston, Blaine to Caribou.
The program is locally-driven: the municipality, town, or city defines the district and chooses how much of the new taxes will go to what public and private projects over what period of time, with the whole package requiring local political approval.
A business should approach a municipality with a proposal for investment for which a TIF district would provide financing. Or, a town might take advantage of an already-planned and financed project and create a TIF district around it, capturing a portion of new property tax revenue for specific uses.
Over their term, TIF districts can return thousands to millions of dollars to a municipality. The projects financed may range from upgrading a road or adding a wing to an existing building, or to the original TIF project in Caribou, where public services were extended to serve the Caribou Inn and Convention Center.
If your municipality is interested in exploring the possibilities of a TIF district, please contact us for more assistance.