In 2003 Governor John E. Baldacci established Pine Tree Zones to make areas that needed economic development more attractive to businesses by providing tax incentives. Those privileges have been extended to cover the entire state. Under the new law a two-tiered system will be implemented so that more economically challenged areas will have a longer benefit period.
“The program has resulted in more opportunities for Maine workers and businesses. This bill comes at an important time,” said the Governor. “Pine Tree Zones enable Maine to encourage growth internally, and attract new businesses.”
According to the Maine Department of Economic and Community Development, at the end of 2008, there were a total of 213 Pine Tree Zone certified businesses in Maine, who reported their plans to create more than 6,500 jobs and invest $685 million. Those jobs are expected to generate $203 million in payroll.
Areas that have been identified as zones with higher economic development needs will have PTZ benefits for companies for ten years. Less challenged economic locations, York and Cumberland Counties, will receive the benefits for five years.
“During these difficult economic times, it’s vital that we continue to take aggressive steps to encourage business growth and job creation, including continued focus on target sectors like manufacturing and technology, expansion across Maine of tax free areas for them to grow in, and the lowering of taxes like our recent income tax reduction,” said the Governor.
Because of recession, in calendar year 2009 only, all of Maine will provide 10 years of PTZ benefits anywhere in the state. The goal is to encourage development projects spurring job creation and investment.
Companies that received awards within the last year totaling $50million from bond funds, for their technological expertise and growth plans, are certified Pine Tree Zone businesses. All of them have expanded in recent years because of these tax incentives; many would not have been able to do so without them. One recipient, Hodgens Yachts, are now opening a new business in Hamden after expanding to Richmond last year.
The state-of-art hydroponic tomatoes farm, Backyard Farms, are expanding adding 75 new jobs along with a new green house. They wish to turn Maine, “into the breadbasket of New England,” said the CEO when they first opened. They are here because of the incentives provided by Pine Tree Zones, tax incremental financing offered by Madison, and the workforce.
Other companies searched America to find the best location. They focused on workforce potential, and tax incentives. NotifyMD, Barclays Bank and Tmobile, to name a few, would never have located to Maine without the Pine Tree Zone incentives.
More about the new law and Pine Tree Zones:
Pine Tree Development Zone is a performance-based program; businesses do not receive benefits unless they create quality jobs and make additional investments.
Quality jobs are full time, income at or above the county per capita average, provide access to group health insurance, and provide access to a qualified retirement plan
A business must be classified in 1 of 9 qualifying sectors. These include Advanced Technologies for Forestry & Agriculture, Aquaculture & Marine Technology, Biotechnology, Composite Materials, Environmental Technology, Financial Services, Information Technology, Manufacturing, and Precision Manufacturing.
Benefits include income tax credits, sales tax exemptions, employee income tax withholding (payroll tax) reimbursements, and access to reduced utility rates; these provide a nearly tax free period of benefits for the duration of a company’s Pine Tree Development Zone certification.