The Dirigo Business Incentive Program is now in motion, providing a powerful framework for growth and investment in Maine’s manufacturing sector. With the application process open as of July 2024 and approvals effective starting January 1, 2025, businesses have a new opportunity to access significant tax credits. Here’s what manufacturers need to know to make the most of this program.
Qualifying Investments and Expenses
Eligible expenses include total business expenditures exceeding $50,000 for purchasing business property placed in service during the tax year. The program’s Capital Investment Credit offers refundable tax credits based on location: 10% for investments outside Cumberland, Sagadahoc, and York counties, and 5% within those counties, capped at $500,000 annually. The Employee Training Credit provides $2,000 per employee for qualified training programs, such as apprenticeships. These incentives encourage modernization, workforce development, and sustainable growth.
Required Submission Information
To apply, businesses must submit detailed documentation, including:
- Investment Details: A breakdown of capital investments exceeding the $50,000 threshold.
- Training Programs: Information on qualified employee training initiatives.
- Eligibility Proof: Evidence that the business operates in one of the eligible industries, such as manufacturing, software publishing, or engineering services.
- Compliance Confirmation: Documentation showing adherence to program requirements.
Strategic Benefits for Maine Businesses
This program isn’t limited to manufacturers—it also supports other industries critical to Maine’s economy, such as agriculture and engineering. With credits available to corporate taxpayers, pass-through entity owners, and trust or estate beneficiaries, the program is designed for broad participation. It also offers the flexibility to carry unused credits forward for up to four years.
Act Now to Maximize Benefits
Maine businesses are encouraged to act swiftly to capitalize on these incentives. The total available credits are collectively capped at $2 million annually, making early application vital. By preparing your application thoroughly and submitting complete information, you can ensure eligibility and begin 2025 with a strong competitive edge.
For additional guidance or to explore how your business can maximize the program’s benefits, contact your team of advisors today. For a deeper dive into the program’s benefits and strategic advantages, see our original article, The Dirigo Business Incentive Program: Empowering Growth for Maine Manufacturers.
by Holly Ferguson, CPA
Holly Ferguson is a principal at ARB and the Practice Leader of the firm’s Accounting & Attest, Manufacturing, and Credit Union Services Teams. She provides industry-specific services for manufacturers, distributors, credit unions, businesses, and nonprofit organizations. Throughout her career, Holly has provided manufacturers with financial reporting consulting services, assisted with transactional accounting and consulting related to business acquisitions/sales, and analyzed implications and strategic implementation of new accounting standards. She is the former Treasurer on the Board of Directors and Finance Committee of the Manufacturers Association of Maine.
