Maine is benefiting greatly from the Tax Cuts and Jobs Act enacted by congressional Republicans and President Trump:
87,820 Maine households are benefiting from the TCJA’s doubling of the child tax credit.
Every income group received a tax cut. Nationwide, a typical family of four received a $2,000 annual tax cut and a single parent with one child received a $1,300 annual tax cut.
479,200 Maine households are benefiting from the TCJA’s doubling of the standard deduction. Thanks to the tax cuts, nine out of ten households take the standard deduction which provides tax relief and simplifies the tax filing process.
25,460 Maine households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.
Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, Maine residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, at least five Maine utilities reduced their customers’ bills (see below).
Thanks to the tax cuts, Maine businesses of all sizes are hiring, expanding, raising pay and increasing employee benefits:
Hancock Lumber (Casco, Maine) — Used savings from the Tax Cuts and Jobs Act to increase wages, increase 401k contributions, increase holiday bonuses, as well as cover 100% of annual health insurance increases.
“It’s pretty straightforward,” said Hancock Lumber CEO Kevin Hancock. “As a result of tax reform, our cumulative tax rate fell from 38 percent to 28 percent. We’re keeping a dime-on-a-dollar more of our earnings. And we’ve reinvested 100 percent of that back into the business.”
“The first priority of the company is, and always has been, the people who work here,” said Hancock. “In the twelve months following tax reform we increased our employees’ wages. We increased our 401k contribution. We increased our annual bonuses, we increased our holiday bonuses, and we picked up 100 percent of the cost of our annual health insurance increases.”
“We’ve been able to accelerate our reinvestment plans,” said Hancock. “Tax reform is allowing us to do in three years what might’ve taken us four to five years to do otherwise. That’s pretty significant.”
“Most importantly, this isn’t a one-time boost. Tax reform’s benefits will show up every single year in the future,” said Hancock. “It’s strengthening our future plans as much as our present plans. Simply put, any time a good company is able to keep more of its own money, good things happen.” — Aug. 20, 2019 NAM Shopfloor Blog
Pottle’s Transportation (Hermon, Maine): Purchasing new equipment — 25 tractors and 25 trailers:
Barry Pottle, CEO of Pottle Transportation, plans to buy 25 tractors and 25 trailers this year, adding capacity to his 170-unit truckload fleet.
“Before the tax bill, we were planning on trading in trucks, but now we would like to grow our fleet because we think our customers will also benefit and be busier, too,” Pottle told TT. – Feb. 12 2018, Transport Topics article excerpt
Windham Millwork (Windham, Maine) – increase workforce by 20 percent, $1 million facility expansion, employee bonuses, wage increases:
Windham Millwork in Windham, Maine is planning to increase its workforce by 20 percent (from 80 employees to 100) and start a $1 million expansion of its facility. It also gave an immediate bonus of $1,000 to its hourly employees and across-the-board pay increases that the company said were a “direct result” of tax reform. – Testimony of David Farr, Chairman and CEO, Emerson, before the House Ways and Means Committee excerpt
IDEXX Laboratories Inc. (Westbrook, Maine) – Increased 401(k) contributions:
IDEXX Laboratories Inc. (NASDAQ: IDXX), Maine’s largest publicly traded company, on Thursday announced plans to share the benefits of federal tax reform with employees by paying more into their retirement plans.
For every dollar a 401(k) participant contributes, the Westbrook-based company will match that amount dollar-for-dollar up to 5% of an employee’s salary.
The company said the move is a reinvestment of financial benefits realized from US tax reform to help employees save for retirement, and that 90% of its U.S. employees participate in its 401(k) program.
“IDEXX strives to create long-term value for our employees, customers and shareholders, and we believe in providing benefits to our employees that allow them to invest in their future,” said Giovani Twigge, IDEXX’s chief human resources officer, in a statement.
He added: “This 401(k) plan increase for our U.S. employees — nearly 2,500 of which are based here in Westbrook, Maine—is yet another example of this commitment of creating long-term value for our employees.”
IDEXX makes diagnostic tests for pets, poultry and livestock as well as quality and safety tests for water and milk. It employs more than 7,000 people worldwide and has customers in over 175 countries.
As of Thursday’s market close, the company was valued at around $16.9 billion.” — Feb. 2 2018, Mainebiz news article excerpt
Central Maine Power Company (Augusta, Maine) – the utility will pass along tax cut savings to customers:
CMP will decrease distribution rates by $16,429,187 to reflect distribution revenue requirement savings associated with the Tax Act. The decrease associated with the Tax Act -4- includes the one-time deferral of Tax Act benefits of $5,641,368 associated with the period January 2018 – June 2018. – June 21, 2018, State of Maine Public Utilities Commission Central Maine Power Company Annual Compliance Filing
Emera Maine (Bangor, Maine) – The utility is passing along tax savings to customers:
On October 2, 2017, Emera Maine filed a petition for an increase its distribution rates (Docket 2017-00198). Emera Maine requested a $10 million, or 12%, increase in its overall distribution revenues. In late December 2017, while the Company’s rate request was still pending before the Commission, Congress passed the Tax Cuts and Jobs Act (TCJA) which became law on January 1, 2018. Among its provisions, the TCJA reduced the corporate tax rate from 35% to 21%. The Commission required that Emera Maine update its rate request to reflect the impact of the TCJA on its proposed rates. By Order dated June 28, 2018, the Commission authorized the Company to increase its delivery rates by $4.5 million or 5.32% as of July 1, 2018. The Commission’s decision is based on a cost of equity of 9.35%. The approved rates reflect the current federal tax rate of 21%. The Commission’s decision also required that Emera Maine defer the difference between rates based upon the 34% and 21% tax rate for the period of January 1, 2018 to June 30, 2018. By Order dated September 11, 2018, the Commission granted in part a Motion for Reconsideration from the Company, deciding to reopen the question of how the savings associated with the TCJA for the January 1, 2018 through June 30, 2018 time period should be calculated. This issue is being considered in another docket (Docket 2018-00271) in conjunction with the review of the excess deferred income taxes that resulted from the TCJA. – Maine Public Utilities Commission document
Northern Utilities (Portland, Maine) – The utility is passing along tax savings to customers:
On May 31, 2017, Northern Utilities requested approval for an increase in distribution rates of $6.5 million. After incorporating the effect of the TCJA and the Commission’s determinations in the case, the Commission ordered Northern to decrease its rates by $87,243 as of March 1, 2018. The Commission did not approve any rate increase associated with the adjustments presented by the Company to its test year operating revenues. – Maine Public Utilities Commission document
Maine Natural Gas (Brunswick, Maine) – The utility is passing along tax savings to customers:
On January 11, 2018, the Commission opened an investigation into the impact of the TCJA on Maine Natural Gas and whether any rate adjustments are warranted (Docket 2018-00005). The Company’s rates were adjusted to reflect the effects of the TCJA in its annual rate adjustment filing (Docket 2018-00057). – Maine Public Utilities Commission document
Maine Water Company (Saco, Maine) – The utility is passing along tax savings to customers:
According to the Stipulation, only five MWC Divisions – Camden and Rockland, Freeport, Oakland, Skowhegan, and Millinocket – will experience significant reductions in their overall federal income tax expenses as a result of the Tax Act. MWC has agreed to record a monthly regulatory liability for the reduction in its federal income tax expense beginning January 1, 2018, and continuing through the next applicable rate case, plus carrying costs set at MWC’s last allowed weighted average cost of capital (WACC) for those five Divisions. This accumulated liability will flow back to ratepayers over a period to be decided in each Division’s next general rate case, which will be filed no later than March 1, 2022. MWC will also record excess water infrastructure surcharge revenues, including carrying costs set at their last allowed WACC, from the same five Divisions beginning January 1, 2018, and continuing until the effective date of any adjustments made to the water infrastructure surcharge in the division’s next water infrastructure surcharge filing. With respect to the four Divisions that will not book a regulatory liability but have a decrease in water infrastructure surcharge revenue as a result of the Tax Act, the Company will make a full adjustment of the water infrastructure surcharge revenue in those Divisions’ next water infrastructure surcharge filing.
Additionally, MWC will treat excess deferred income taxes (EDITs) as an adjustment to rate base in each Division. The total EDIT balance at the time of a general rate filing will be allocated to the Division seeking to increase rates using the allocation method developed in Docket No. 2017-00163 and shown in Appendix B to the Stipulation. Adjustments generated by the Tax Act related to plant assets will be returned to ratepayers using the average rate assumption method as required by the Internal Revenue Service. MWC will amortize non-plant asset EDITs over a 10-year period beginning at the conclusion of each Division’s next general rate case. – March 15, 2019 Maine Public Utilities Commission document
LignaTerra Global (Lincoln, Maine) — A company that makes a composite wood material is opening a new factory that will employ 100 people, located in an Opportunity Zone created by the Tax Cuts and Jobs Act:
A North Carolina company that makes a composite wood material used in construction plans to invest $31 million into opening a new factory in Lincoln that will employ about 100 people.
LignaTerra Global LLC will build its new 300,000-square-foot plant on a section of open land that was formerly part of the former Lincoln Paper and Tissue mill site, but that the town bought early last year. The company initially planned to open its plant at the former paper mill site in Millinocket but withdrew those plans late last year as a local economic development group struggled to resolve an old federal tax lien on the property.
The operation will be funded by venture capital firms that are taking advantage of a new federal tax program that’s meant to promote investment in economically depressed parts of the country, according to Nick Holgorsen, LignaTerra’s managing director and co-founding partner.
Under that program, a part of the 2017 tax bill passed by Congress, the town of Lincoln has been designated a so-called Opportunity Zone, and the town has used that status to create a special fund through which investors can support eligible projects and potentially receive a break on their capital gains taxes. — September 25, 2019 Bangor Daily News article
Maine Beer Co. (Freeport, Maine) – The company used savings from the Tax Cuts and Jobs act to expand and reinvest in the business and employees:
“The savings resulting from the adjusted FET rates have had a huge impact on the brewing industry here in Maine,” Dan Kleban, co-owner of Maine Beer Co., said in a news release from the Brewers Association, a Boulder, Colo.-based trade group.
“Our company was already in the midst of an expansion when this bill passed, and the savings allowed us to reinvest in the business, our employees and the environment,” Kleban said. “Growth in Maine’s brewing industry has helped boost other economies throughout the state; creating new agricultural opportunities, helping increase tourism and even shaping beer science programs in our local colleges. In uncertain financial times, these savings help create a stronger economic future here in Maine.” – Dec. 27, 2019, Mainebiz article.
Camden National Bank (Camden, Maine) – Permanent salary increases forthcoming; also $1,000 bonuses to all non-executive full-time employees; $750 bonus to part-time employees; total bonuses are $620,000:
Camden National Bank said Thursday that next week it will give one-time bonuses of $1,000 to all non-executive full-time employees and $750 to all part-time employees in response to the recently enacted corporate tax cut. The total cost of those bonuses will be $620,000, it said.
Camden National also said it plans to give permanent raises to employees, but that it will first bring in a consultant to help it determine the appropriate amounts of those raises. – Jan. 11, 2018 Portland (Maine) Press Herald article excerpt
Everett J. Prescott Inc. (Gardiner, Maine) – $1,000 bonuses for employees with more than a year of service, $250 for employees with less than a year:
A Maine company says 300 employees will receive bonuses following changes to the federal tax code enacted at the end of 2017.
Everett J. Prescott Inc., a Gardiner-based waterworks materials company, says the bonuses will arrive Monday. The Kennebec Journal reports CEO Peter Prescott said Friday that many employees will receive a $1,000 bonus.
He says employees with less than a year of service will still receive a $250 bonus.
The family-owned company employs about 300 people across 26 locations in New England, New York, Ohio and Indiana. Prescott says the average tenure of an employee is 20 years. – March 5 2018, WABI article excerpt
Starbucks Coffee Company (30 locations in Maine) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.
Apple (Retail location in South Portland, Maine) — $2,500 employee bonuses in the form of restricted stock units; Nationwide, $30 billion in additional capital expenditures over five years; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing.
AT&T — $1,000 bonuses to 125 Maine employees; Nationwide, $1 billion increase in capital expenditures:
Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.
Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”
Since 2012, AT&T has invested more in the United States than any other public company. Every $1 billion in capital invested in the telecom industry creates about 7,000 jobs for American workers, research shows. — Dec. 20, 2017 AT&T Inc. press release
Walmart – Mainers employed at 22 Walmart stores received tax reform bonuses, wage increases, and expanded maternity and parental leave. Walmart employees who adopt children will be given $5,000 to help cover expenses.
Chipotle Mexican Grill (Locations in Bangor, Augusta, Portland, Westbrook, and South Portland) – Bonuses ranging from $250 to $1,000; increased employee benefits; Nationally, $50 million investment in existing restaurants.
Comcast (Locations in Brunswick, Maine) — $1,000 bonuses; at least $50 billion investment in infrastructure in next five years.
CarMax (Portland, Maine) – $250-$1,500 bonuses depending on length of service:
“The nation’s largest retailer of used cars, announced plans to provide one-time bonuses to most hourly and commissioned full-time and part-time associates as a result of the recently passed Tax Cuts and Jobs Act of 2017. Bonus amounts will vary from $200 up to $1,500 based on length of service with the company.” – Feb 23. 2018, EPR Retail News article excerpt
This incremental investment in our associates was made possible by the new tax reform bill. — Jan. 25, 2018 Home Depot press release
The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:
- A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
- An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
- Instituting paid parental leave for eligible Associates in the U.S.
- Enhancing vacation benefits for certain U.S. Associates
Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving – Feb. 28, 2018 The TJX Companies Inc. press release excerpt
Bank of America (16 locations in Maine) — $1,000 bonuses.
U-Haul (Multiple locations in Maine) – $1,200 bonuses for full-time employees, $500 for part-time employees.
Cintas (Multiple locations in Maine) — $1,000 bonuses for employees of at least a year, $500 bonuses for employees of less than a year.
CVS Health (Multiple locations in Maine) — Base wage raised to $11 per hour, and other pay ranges adjusted accordingly; company will absorb increases costs of health insurance premiums; creation of new parental leave program.
Waste Management, Inc. (Multiple locations in Maine) — $2,000 bonuses.
McDonald’s (60+ locations in Maine) – Increased tuition investments which will provide educational program access for 400,000 U.S. employees. $2,500 per year (up from $700) for crew working 15 hours a week, $3,000 (up from $1,050) for managers, and more:
McDonald’s Corporation today announced it will allocate $150 million over five years to its global Archways to Opportunity education program. This investment will provide almost 400,000 U.S. restaurant employees with accessibility to the program as the company will also lower eligibility requirements from nine months to 90 days of employment and drop weekly shift minimums from 20 hours to 15 hours. Additionally, McDonald’s will also extend some education benefits to restaurant employees’ family members. These enhancements underscore McDonald’s and its independent franchisees’ commitment to providing jobs that fit around the lives of restaurant employees so they may pursue their education and career ambitions.
The Archways to Opportunity program provides eligible U.S. employees an opportunity to earn a high school diploma, receive upfront college tuition assistance, access free education advising services and learn English as a second language.
“Our commitment to education reinforces our ongoing support of the people who play a crucial role in our journey to build a better McDonald’s,” said Steve Easterbrook, McDonald’s President and CEO. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere.”
Accelerated by changes in the U.S. tax law, McDonald’s increased investment in the Archways to Opportunity Program includes:
- Increased Tuition Investment:
- Crew: Eligible crew will have access to $2,500/year, up from $700/year.
- Managers: Eligible Managers will have access to $3,000/year, up from $1,050.
- Participants have a choice for how they apply this funding – whether it be to a community college, four year university or trade school. There is no lifetime cap on tuition assistance – restaurant employees will be able to pursue their education and career passions at their own pace. The new tuition assistance is effective May 1, 2018 and retroactive to January 1, 2018.
- Lowered Eligibility Requirements: Increase access to the program by lowering eligibility requirements from nine months to 90 days of employment. In addition, dropping from 20 hours minimum to 15 hours minimum (roughly two full time shifts) per week to enable restaurant employees more time to focus on studies.
- Extended Services to Families: Extension of Career Online High School and College Advisory services to restaurant employees’ family members through existing educational partners Cengage and Council for Adult and Experiential Learning (CAEL).
- Additional Resources: Career exploration resources for eligible restaurant employees to be available later this year.
- Creation of an International Education Fund: Grants to provide local initiatives and incentives in global markets to further education advancement programs.
“Since its inception, Archways to Opportunity was meant to match the ambition and drive of restaurant crew with the means and network to help them find success on their own terms,” said David Fairhurst, McDonald’s Chief People Officer. “By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future.”
After launching in the U.S. in 2015, Archways to Opportunity has increased access to education for over 24,000 people and awarded over $21 million in high school and college tuition assistance. Graduates have received college degrees in Business Administration, Human Resources, Communications, Accounting, Microbiology and more. – March 29, 2018 McDonald’s Corporation press release excerpt
Note: If you know of other Maine examples, please email John Kartch at [email protected]