Recently, Maine Governor Janet Mills signed legislation renewing and expanding Maine’s New Markets Capital Investment Program and Historic Tax Credit Program. These changes should be welcomed by businesses, nonprofits, and developers as they are intended to encourage investment in the state by providing tax credits to support significant community-building capital projects. 

New Markets Tax Credits (NMTCs)

Maine first created its new markets tax credit program in 2011 to encourage investment in low-income areas of the state. At the time, $250 million of tax credit allocation was authorized, the vast majority of it being utilized in the first four years of the program’s existence. The Legislature has now renewed the program, authorizing a second round of tax credit allocation in the same amount. 

Maine NMTCs are a credit against Maine income taxes for investors that make investments in certain private organizations, known as community development entities (CDEs). CDEs then use the proceeds to make qualifying investments in the form of loans or equity investments in business located in the state’s low-income communities. 

Like the federal NMTC program, a low-income community is generally a census tract in which the poverty rate exceeds 20% or the median income is less than 80% of the area average, but can also include municipalities where the average unemployment rate exceeds the statewide average. 

Examples of qualifying businesses include manufacturers, commercial real estate projects, hotels, grocery stores, museums, and health care centers. We expect the new $250 million allocation to be awarded to CDEs in early 2026.

Historic Tax Credits (HTCs)

Maine has long had a robust historic tax credit program, which provides tax credits against Maine income taxes as an incentive to rehabilitate historic buildings throughout the state. Where a taxpayer owns a “certified historic structure,” which is any building listed in the National Register of Historic Places or located in a Registered Historic district, and that taxpayer incurs “qualified rehabilitation expenditures” (QREs) such as costs to rehabilitate the structure, HTCs are available as an offset (or in certain cases, a refund) against Maine income taxes. 

The credit is generally equal to 25% of the amount of QREs incurred, but the program has historically included a limit of $5 million of tax credits for any building. Beginning this year, and continuing through December 31, 2027, that limit is increased to $10 million. In 2028, the limit will revert to $5 million. The Legislature also increased the credit percentage for projects in rural communities (population less than 12,500) if the project includes a significant housing component.