Maine’s Dirigo Business Incentives Program Offers Significant Benefits to Qualified Businesses

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For tax years beginning on or after January 1, 2025, Maine’s new Dirigo Business Incentives Program (Dirigo Program) provides significant tax credits to qualified business that make eligible capital investments in Maine, or that provide qualified training to their employees in this state.

To participate in the program, a business must first be certified by the Maine Department of Economic and Community Development (DECD) as a qualifying Maine business engaged in one of the following eligible sectors. The sectors are identified by reference to the entity’s industry code in the 2022 North American Industry Classification System (the NAICS codes are in parentheses below).

  • Agriculture, forestry and fishing (1111 through 1141; 1151 through 1153);
  • Manufacturing (31-33);
  • Long-distance freight transportation (481112, 481212, 482, 483111, 483113, 483211, 48412, 48423, 48819, 4882, 4883, 4885);
  • Software publishing (5132), data processing (518) and computer design services (5415); or
  • Engineering (5413), architecture (5413) and scientific research and development services (5417).

Applications must be submitted online through the DECD website here. A business must be certified prior to making expenditures for which it intends to claim a credit.

The tax credit is equal to:

  1. 10% of the eligible capital investment for property placed in service in Maine during the taxable year outside of Cumberland, Sagadahoc, and York counties; plus
  2. 5% of eligible capital investment in property placed in service during the taxable year in Cumberland, Sagadahoc, and York counties; plus
  3. $2,000 for each qualified employee that completes a qualified training program during the tax year.

The credit is limited to $2 million and is refundable up to $500,000 for any one tax year. The credit and the refundability cap must be prorated among affiliated businesses or members of pass-through entities. The credit is requested as part of an applicant’s filing of their Maine state income tax return. Unused portions of the nonrefundable portion of the credit may be carried forward for up to 4 succeeding tax years.

More information about the Dirigo Program and the application process can be found on the DECD’s website here and in Maine Rule 815.

The Dirigo Program could provide valuable tax credits, including refundable credits of up to $500,000, to qualifying Maine businesses.

If you would like more information about the Dirigo Program and how it could benefit your business, please contact Merrill Barter or your BNN tax advisor.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.