Are parts of the tax-reform bill (LD 1495) unconstitutional? Previous cases (see Travis v. Yale & Towne Mfg) have ruled under Privileges and Immunities Clause of the U.S. Constitution that generally a state cannot deny deductions and exemptions to non-residents that are given to residents. LD 1495 eliminated deductions (standard and itemized) and exemptions for everyone. However, the bill provided a household tax credit, an additional credit of $250 per exemption and an alternate household credit based on a percentage of itemized deductions. These credits are available only to residents and to part-year residents for the portion of the year they were residents. Changing deductions and exemptions from a deduction from income to a deduction from tax does not change the effect. They both reduce tax. A nonresident could have a tax credit denied for unreimbursed employee expenses incurred directly in the production of the Maine income he/she is being taxed on while a Maine resident could be getting a tax credit for this expense for the same job. The elimination of deductions or credits for nonresidents could result in legal challenges. I would guess you might see one coming from Seavey's Island in Kittery. A lot of additional costs and potential refunds to nonresidents in future years could result. Just another reason to send this bill back to the drawing board.

Ron Squiers

Readfield