Taxation Committee Unanimously Advances Daughtry Tax Credit Proposal to Address Affordability

AUGUSTA, Maine – The Legislature’s Taxation Committee this week voted unanimously to advance LD 1954, a bill sponsored by Senate President Mattie Daughtry, D-Brunswick, aimed at helping to lower everyday costs for Maine households.

LD 1954 was originally introduced last session as a proposal to lower household costs by expanding the sales tax exemption on certain grocery items. After further analysis and discussion with Maine Revenue Services and members of the Taxation Committee, Daughtry proposed a strike-and-replace amendment that modernizes and updates Maine’s existing Sales Tax Fairness Credit to better reflect current affordability pressures and the increasing cost of living due to inflation.

The amendment also updates the bill’s title to “An Act to Update the Sales Tax Fairness Credit.”

The proposal would increase the credit amount and would begin to phase it out at $34,000 for single filers, $51,000 for heads of household and $68,000 for married joint filers. The existing credit is currently aligned with household size and filing status. Maximum credit levels increase based on household size, and would reach up to $315 for larger households under this proposal.

“This proposal reflects the conversations we’ve been having across Maine about the real pressure families are feeling from the cost of everyday necessities,” said Daughtry. “The committee took a thoughtful approach to this bill, and I appreciated the opportunity to refine it so it provides targeted relief while remaining fiscally responsible.”

Daughtry noted that the updated structure was informed by the ALICE survival budget as a general framework for understanding household economic needs, helping ensure the credit is focused on families most affected by rising costs.

Maine residents claim the Sales Tax Fairness Credit when filing their annual Maine income tax return by completing the appropriate form. The credit is calculated using income and household information reported on the form, and eligible households can receive the benefit even if they do not owe income tax. Residents do not need to track or submit receipts for everyday purchases to claim the credit.

“I’m grateful to the members of the Taxation Committee for their collaboration and for advancing this legislation with unanimous support,” Daughtry said. “Updating the Sales Tax Fairness Credit is a practical way to put money directly back in the pockets of Maine people while strengthening our broader effort to make everyday costs more manageable.”

The bill now moves to the full Legislature for consideration.

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