Maine · research and development · ME-RD-001
Research Expense Tax Credit
Publication revised September 24, 2026. Sourcebook page 134.
Credit amount / calculation
5% of excess qualified research expenses plus 7.5% of qualifying basic-research payments; long carryforward.
Business fit and eligible activity
Qualifying Maine research can produce an incremental credit for wood-products manufacturers. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Illustrative business benefit
A hardwood mill spends $320,000 on a documented project to improve recovery from low-grade logs using scanner changes, controlled test runs, software adjustments, and revised sawing patterns. Assume $200,000 is ultimately treated as the relevant qualified or excess research base. At 5%, the state credit would be about $10,000 before program caps and tax-liability limits. The company would need records showing the uncertainty, alternatives tested, people involved, and results - not simply a year-end estimate of 'engineering time.'
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit.
Official sources
- legislature.maine.gov — Title 36, §5219-K: Research expense tax credit (legislature.maine.gov)
Related programs
Dirigo Capital Investment Credit
Generally
Exceptional fit: eligible sectors expressly include forestry/fishing and manufacturing, so both some forest operations and mills can qualify.
Dirigo Training Credit
$2,000 per employee receiving qualifying training
Eligible forestry and manufacturing businesses can receive a credit for qualified employee training.
Renewable Chemicals Tax Credit
$0.08 per pound of qualifying renewable chemical meeting
Potentially relevant when wood residuals are converted into qualifying renewable chemicals rather than fuels.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.
Rehabilitation Credit (Internal Revenue Code §47)
Generally
A forest-products company rehabilitating a certified historic mill or industrial building for income-producing use may qualify.