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ME — State Policy Updated January 2026

Maine

Pine Tree Development Zone tax credit Employment Tax Increment Financing Business Equipment Tax Exemption Municipal Tax Increment Financing On-site generation cap for data centers (LD 912) Local zoning approval required

Overview

Maine does not offer data center–specific incentives. Instead, developers rely on general business tax credits, property tax exemptions, and local tax increment financing. The state enacted a targeted restriction in 2025 (LD 912) that limits how much on-site generation at certain commercial or industrial sites can serve data centers, reflecting regulatory concern about grid impacts and ratepayer costs. Local opposition remains a significant barrier, as illustrated by Lewiston’s unanimous rejection of a proposed AI data center in December 2025.

Incentives

Pine Tree Development Zone tax credit

Maine’s PTDZ program offers state tax credits to certified businesses engaged in qualified activities, including information technology, that create net new jobs. Businesses can no longer be certified for PTDZ after December 31, 2024, and PTDZ benefits end after December 31, 2034.[4] The program links to enhanced Employment Tax Increment Financing benefits for qualified businesses.

Employment Tax Increment Financing (ETIF)

The ETIF program reimburses a percentage of Maine income tax withholding for qualified new, full-time jobs.[5]

  • Reimbursement rates are 30%, 50%, or 75% of the employment tax increment, depending on the local unemployment rate relative to the state average.
  • PTDZ businesses receive an 80% reimbursement rate for up to 10 years.

Business Equipment Tax Exemption (BETE)

BETE provides a 100% property tax exemption for eligible business equipment first subject to tax on or after April 1, 2008.[6] Data center equipment is often classified as business equipment, materially reducing local property tax exposure.

Municipal Tax Increment Financing (TIF)

Maine’s municipal TIF program lets municipalities capture new property tax revenue within a defined district and redirect some portion of that increment to public or private project costs.[7] This is the main local tool for negotiated property-tax relief or infrastructure support tied to a specific site.

Requirements and Conditions

On-site generation cap for data centers (LD 912)

Maine enacted LD 912 (Public Law 2025, Chapter 85) to limit an exception for certain on-site generation and distribution entities.[1][2]

  • The exception is limited if more than 25% of the entity’s nameplate capacity is used to serve data centers located on the commercial or industrial site.
  • The provision applies only to qualifying sites north of the Town of Chester within the ISO New England control area that were served without public utility transmission and distribution infrastructure before December 31, 2018.

Local zoning approval

Lewiston’s city council unanimously rejected a proposed AI data center in the Bates Mill No. 3 building in December 2025 after public opposition and concerns about environmental and economic impacts.[8] The rejection demonstrates that local zoning, public comment, and political dynamics can override state-level incentives and determine whether projects move forward.

What to Watch

  • Ratepayer protection debate. The Maine Office of the Public Advocate’s 2025 testimony on LD 912 frames data centers as potential ratepayer risk and encourages limits, flexible operations, and co-located generation concepts.[3] This reflects ongoing regulatory concern about large-load facilities even in a state with relatively high electricity prices.
  • Local approval dynamics. Lewiston’s rejection may signal broader municipal skepticism toward data centers in mill towns and repurposed industrial sites.

Sources

[1] Maine Legislature, “Summary of LD 912 (SP 402), 132nd Legislature,” https://legislature.maine.gov/LawMakerWeb/summary.asp?paper=SP0402&SessionID=16 (accessed January 8, 2026).

[2] Maine Legislature, Joint Standing Committee on Energy, Utilities and Technology, “Committee Amendment ‘A’ (S-67) to S.P. 402, L.D. 912,” 132nd Legislature, First Special Session, 2025, https://www.mainelegislature.org/legis/bills/getPDF.asp?paper=SP0402&item=2&snum=132 (accessed January 8, 2026).

[3] Maine Office of the Public Advocate (Heather Sanborn), “Testimony Neither for Nor Against LD 912, ‘An Act to Address the Use of Electricity by Data Centers,’” April 3, 2025, https://www.maine.gov/meopa/sites/maine.gov.meopa/files/inline-files/2025-04-03%20LD%20912%20An%20Act%20to%20Address%20the%20Use%20of%20Electricity%20by%20Data%20Centers.pdf (accessed January 8, 2026).

[4] Maine Revenue Services, “Pine Tree Development Zone Tax Credit: Guidance Document,” December 2024, https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/PTDZ_Guidance_Doc_2024.pdf (accessed January 8, 2026).

[5] Maine Department of Economic and Community Development, “Employment Tax Increment Financing Program Rule (19-100 Chapter 400),” adopted January 13, 2020, https://www.maine.gov/decd/sites/maine.gov.decd/files/inline-files/ETIF%20Program%20Rule%20Adopted%20January%2013%2C%202020.pdf (accessed January 8, 2026).

[6] Maine Revenue Services, “Business Equipment Tax Programs,” https://www.maine.gov/revenue/taxes/tax-relief-credits-programs/property-tax-relief-programs/business-equipment-tax-programs (accessed January 8, 2026).

[7] Maine Department of Economic and Community Development, “Municipal Tax Increment Financing (TIF),” https://www.maine.gov/decd/MTIF (accessed January 8, 2026).

[8] Michael Livingston, “Lewiston City Council shoots down data center proposal,” Maine Public, December 17, 2025, https://www.mainepublic.org/business-and-economy/2025-12-17/lewiston-city-council-shoots-down-data-center-proposal (accessed January 8, 2026).