Pine Tree Development Zones
“Backyard Farms firmly believes the incentives provided by the Pine Tree Development Zone programs are fundamental to our ability to build our business, grow to over 220 employees in 6 years, and continue to invest here, competing on a regional and national level. Thanks to the support from the State of Maine and the Maine Department of Economic and Community Development, we can now bring tomato lovers across the Northeast summertime fresh tomatoes all year long.”–Brian Gowen, CFO
Backyard Farms, Madison
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 when they create new, quality jobs in certain business sectors or move existing jobs in those sectors to Maine.
Over 300 Maine businesses were participating in the PTDZ program in 2011, with reimbursements from thousands to hundreds of thousands of dollars for taxes paid on new employees.
Eligible sectors are:
- Aquaculture and Marine Technology
- Composite Materials Technology
- Environmental Technology
- Advanced Technologies for Forestry and Agriculture
- Manufacturing and Precision Manufacturing
- Information Technology
- Financial Services
A new, quality job is defined as one that:
- Meets the income requirements for the current year. Income includes “income derived from employment” (IDE) or employee earnings, and employer payments toward employee benefits including retirement, health insurance, education, and dependent care. That total for any new, quality job must exceed the per capita personal income for that county according to the Income Table and Definitions (PDF). (You will need the free Adobe Reader to view this document.)
- Includes access to group health insurance with an employer contribution encouraged but not required
- Includes access to group retirement benefits subject to ERISA with an employer contribution encouraged but not required
PTDZ benefits do not apply to jobs moved from one area to another within the state.
How long your business may enjoy PTDZ benefits depends on your location, with the state divided into two tiers. Businesses located in Tier 2 municipalities as listed in the Tier 2 Municipalities 2013 table are eligible for 5 years of benefits, while those in any other municipality in the state are eligible for ten years of benefits.
Depending on your business sector and location, your business may be eligible for corporate tax credits, sales and use tax exemptions for both personal and real property, withholding tax reimbursements of 80%, and reduced electricity rates. (Some financial sector companies may also be eligible for certain insurance tax credits.) Businesses in Tier 2 municipalities are eligible for 5 years of such benefits, 10 years for all others, and any reimbursement, credit, and exemption only applies to net, new payroll and property.